As Pakistan State Oil’s receivables cross Rs300b, it has been learnt that the Ministry of Finance is gearing up to release Rs45b in order to ease the circular debt crisis. Out of this Rs45b, only Rs10b have been earmarked for PSO, which is in dire financial straits and faces the ominous threat of collapse. Rs35b will be given to Independent Power Producers (IPPs). PSO has been struggling through a payment crisis due to a lack of funds and growing receivables.
The payment crisis has created a volatile situation for PSO, as it may default on payment to its creditors too. PSO is owed Rs 257b by power companies, Rs9.6b by the government on price differential claims, Rs 16b by Pakistan International Airlines (PIA) and Rs 18b by Sui Northern Gas Pipelines (SNGPL) for LNG supplies. PSO will be needing Rs165b for providing fuel for power generation to private IPP’s during the ongoing summer season.
If the government is unable to release more funds for PSO, the company will be unable to place anymore import orders, which will further worsen the power crisis and lead to curbs on fuel supply.
