Pakistan State Oil (PSO), the nation’s largest fuel supplier, faces a daunting challenge as its receivables have soared to a record-breaking Rs755 billion, constituting approximately 21 percent of its annual revenue.
In its most recent financial report submitted to the federal government, PSO revealed that nearly 90 percent of its funds were entangled in unpaid dues from government entities, notably the Sui Northern Gas Pipelines Ltd (SNGPL), which alone owed a substantial backlog of about Rs478 billion.
As of the latest available data, the total receivables from various entities reached an alarming Rs754.51 billion, with principal dues accounting for Rs531.4 billion. Consequently, PSO’s payables to international suppliers of oil products and liquefied natural gas (LNG) have escalated to over Rs231 billion. The total payables as of October 15 amounted to Rs292 billion, including a substantial Rs60 billion owed to local refineries.
Significantly, a major portion of the mounting receivables, approximately Rs478 billion, is attributed to SNGPL, which includes approximately Rs115 billion in late payment surcharge and Rs361 billion in dues for LNG supplies.
Moreover, the power sector is also a significant contributor to PSO’s financial woes, with outstanding dues of Rs185 billion. This includes Rs151 billion owed to public sector generation companies and the Central Power Purchasing Agency (CPPA). Hubco has outstanding dues of Rs29 billion, and Kapco’s dues amount to Rs5 billion.
The government’s unpaid obligations have further led to PSO’s escalating payables in the form of letters of credit and standby letters of credit to Kuwait Petroleum and Qatar Petroleum for petroleum products and LNG imports, surpassing Rs231.4 billion. Additionally, the company owes refineries a considerable Rs60 billion, with a significant Rs32.4 billion payable to Parco.
On the other hand, PSO has suspended fuel supplies to PIA over a simmering dispute regarding unpaid dues. As a result of this standoff, PIA was compelled to cancel 14 domestic flights and delay four others, leading to inconvenience for hundreds of passengers.
A spokesperson for PIA confirmed the severe impact of the fuel supply suspension on the airline’s flight schedule. Negotiations between the management of PIA and PSO were reportedly ongoing late into the night on Monday.
The consequences of these cancellations and delays extended not only to passengers but also to the airline’s flight crew, who encountered their own set of challenges and inconveniences resulting from the disrupted flight departures.
