ISLAMABAD: The cash-strapped Pakistan State Oil (PSO) has cautioned the government that oil supply to domestic and international airlines may come to a halt as the company is facing a financial crunch due to payments stuck in the energy chain.
Receivable amount of PSO swelled to Rs355 billion by January 20, 2020 while financial condition of the company seems to have worsened as the board chairman has apprised the finance secretary of the situation and difficult state of affairs.
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The issue was taken up in a recent meeting of the Economic Coordination Committee (ECC) when the Petroleum Division sought to offset the loss of Rs28 billion incurred on loans by the PSO.
The ECC was informed that PSO had so far suffered a net exchange loss of Rs28 billion on bank loans in the wake of rupee depreciation against the US dollar.
The PSO is a cash crunch as its receivable amount from power producers, Sui Northern Gas Pipelines Limited (SNGPL), Pakistan International Airlines (PIA) and the government of Pakistan swelled to Rs335.7 billion by December 15, 2019, the ECC meeting was told.
The huge overdue amount is undermining PSO’s ability to make uninterrupted oil supply to different sectors across the country. There was a risk of default by PSO on local and international payments and in that case jet fuel supply to domestic and foreign airlines may be hampered.
The state of affairs had already been conveyed by the PSO board chairman to the finance secretary and delay in reimbursement of the exchange loss on loans may worsen the situation.
