The federal government is set to release Rs30 billion to Pakistan State Oil (PSO) to mitigate its revolving debt and streamline PSO arrears.
Sources from the Ministry of Finance have confirmed that Rs5 billion has already been allocated to Sui Northern Gas Pipelines Limited (SNGPL) for onward payment to PSO.
The remaining Rs25 billion, intended for subsidies to domestic consumers and fertiliser plants, is due for release this week.
The disbursement of the full Rs30 billion to SNGPL is expected to facilitate prompt payments to PSO.
This funding, designated for subsidies, aligns with the budgetary allocations already set aside by the government.
According to government insiders, the federal cabinet is also considering a significant policy decision next week.
This involves transferring the ownership of two power plants to PSO as part of a strategy to reduce the company’s revolving debt.
PSO will acquire a controlling interest in the two power plants, once it is approved by the cabinet.
This move is projected to decrease the gas sector’s revolving debt by around Rs100 billion, consequently reducing PSO’s total revolving debt by approximately Rs130 billion.
PSO’s debt has been escalating since its foray into the liquefied natural gas (LNG) market.
The company had previously signed an agreement with Qatar Petroleum for LNG imports under a government-to-government (G2G) arrangement, which added additional financial strain.
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