PSO forced to rely on borrowing as mounting receivables from gas, power sectors strain its operational liquidity

Pakistan State Oil (PSO) has been forced to rely heavily on short-term bank borrowing as mounting unpaid receivables from the country's gas and power sectors severely strain its operational liquidity, raising fresh concerns over the stability of the national fuel supply chain, according to industry data.

Sui Northern Gas Pipelines Limited (SNGPL) accounts for the largest share of these overdue payments, with outstanding liabilities reaching Rs536 billion as of July 23, 2026. This includes Rs274 billion in principal dues and Rs253 billion in late payment surcharge (LPS).

Industry sources say recoveries from SNGPL continue to lag behind the pace of ongoing imported LNG shipments, creating a persistent cash flow gap for PSO.

Receivables from the power sector have meanwhile climbed to Rs168 billion, with a significant portion outstanding since FY2018-19, adding further financial pressure on the company.

The growing pile of unpaid dues has created a systemic bottleneck across the energy supply chain, from domestic refineries to international fuel suppliers.

PSO's reliance on bank borrowing has pushed up debt servicing costs and rapidly eaten into available credit lines.

The liquidity squeeze is limiting PSO's ability to meet its financial obligations to both local refiners and foreign suppliers on time.

Energy sector analysts warn that without a structured and immediate settlement plan from the government, the ongoing liquidity crisis could disrupt fuel procurement schedules and pose serious risks to national energy security.