PSO’s inter-corporate debt swells to Rs1.050 trillion

Khalid Mustafa
Saturday, Mar 18, 2023

ISLAMABAD: Financial vulnerabilities of the country’s state-owned oil marketing company Pakistan State Oil (PSO) have further increased as its receivables and payables have swelled by Rs26 billion in a week, data available with The News showed on Friday.

The inter-corporate debt rose to Rs1.050 trillion, which was at Rs1.024 trillion a week ago (March 8).

PSO is facing an imminent default on LNG transactions and the company has suggested to the government to impose a levy of Rs10 per liter Mogas and diesel to arrange Rs100 billion to avert a default on LNG payments.

However, the government has not entertained that suggestion. Rather, Economic Coordination Committee, met on March 14, approved a sovereign guarantee in favor of Sui Northern for commercial borrowing of Rs50 billion to pay some of the dues to PSO.

The gas consumers will be penalised as they will pay the interest rate on commercial borrowing of Rs50 billion meaning that consumers will pay against the inefficiency of Sui Northern for its failure to recover the LNG cost from power, fertiliser sectors, and residential consumers as well.

The inter-corporate debt of the financially beleaguered PSO has made it unable to Rs273.4 billion against the import of LNG from Qatar and diesel from Kuwait Petroleum Corporation (KPC), including Rs51 billion to five local refineries.

According to the payable and receivables position of PSO as of March 15, Sui Northern has defaulted an amount of Rs501 billion, which had stood at Rs492 billion on March 8, 2023.

However, the latest data shows that the receivables of the entity have increased to Rs777 billion from Rs763 billion on March 8 and payables to Rs273.4 billion from Rs261 billion. It has aggravated the financial miseries of PSO as some of the refineries have also refused to provide the POL products to PSO.

The receivables from the power sector continued to be at Rs178 billion and Pakistan International Airlines at Rs 24.9 billion.

Coming to the payables of PSO towards refineries stood at Rs51 billion, which is required to pay Rs24.9 billion to PARCO, Rs8.5 billion to PRL, Rs3.4 billion to NRL, Rs9.049 billion to ARL, Rs4.1 billion to BYCO and Rs763 million to ENAR.

PSO is required to offload its financial obligation amounting to Rs223 billion with regard to letters of credit, against the import of LNG from Qatar and diesel from KPC.