Pakistan State Oil (PSO), the leading oil marketing company of Pakistan, recently convened its board of management (BoM) meeting to review the company’s performance for the nine-month period of the financial year 2018-19.
Despite numerous challenges, PSO maintained its leadership position in the liquid fuels market with an overall share of 40.8pc (white oil 39.2pc and black oil 48.2pc) during the period under review. PSO also maintained the supply chain by importing 47pc of total industry imports and uplifting 35pc of total refinery production in the country to ensure uninterrupted fuel supply to its customers.
The company has earned a profit after tax (PAT) of Rs5.9 billion for the period under review. Major reasons for reduction in PAT is lower gross profit due to a dip in sales volume of black and white oil due to reduction in industry volumes and inventory losses due to the rise in international prices, lower interest income from the power sector, increase in finance cost due to a sharp rise in the discount rate from the SBP, and higher average borrowing levels as compared to same period last year.
The black oil volumes declined primarily due to power production shift towards RLNG whereas the drop in white oil volumes includes access to smuggled products, a decline in automobile sales as against the same period last year, and decrease in contribution from agriculture and large scale manufacturing (LSM) sector towards GDP.
During March 2019, the government partially settled the mounting circular debt through the payment of Rs60 billion, however, receivables from SNGPL increased by Rs40 billion as against June 2018. The outstanding receivables (inclusive LPS) of Rs278 billion as of March 31, 2019, from the power sector, PIA and SNGPL against supplies of furnace oil, aviation fuels and LNG respectively continue to place enormous liquidity pressure on the organization.