Pakistan State Oil (PSO), the nation’s largest oil marketing company, is currently ensnared in a severe financial predicament, with its total receivables soaring to an unprecedented PKR 800 billion. This burgeoning debt is critically undermining the company’s profitability, primarily due to substantial outstanding payments from key clients, as reported by ARY News.
The crisis is largely fueled by a significant debt owed by Sui Northern Gas Pipelines Limited (SNGPL), which stands at a staggering PKR 515.28 billion. SNGPL’s arrears constitute the lion’s share of PSO’s financial woes, posing a substantial threat to the company’s liquidity and operational stability. In addition to SNGPL, the Hub Power Company Limited (Hubco) contributes PKR 14.80 billion to the mounting debt, while various other entities within the energy sector owe PSO an additional PKR 189 billion. Pakistan International Airlines (PIA) further exacerbates the situation with an outstanding balance of PKR 29.25 billion.
The financial strain on PSO is not solely a consequence of delayed payments from clients. The company is also burdened by its obligations to local refineries for the procurement of imported petroleum products. This dual pressure has compelled PSO to seek financial assistance, requesting PKR 50 billion from multiple government ministries in an attempt to stabilize its precarious operations.
Compounding the issue, earlier reports have highlighted that the import bill for re-gasified liquefied natural gas (RLNG) has surpassed PKR 506 billion. This expenditure has directly impacted SNGPL, aligning with the amount it owes PSO for LNG supplies. Additionally, dues from the power sector have surged to over PKR 186 billion, further straining PSO’s financial resources. PIA’s debt alone accounts for approximately PKR 28.75 billion, adding to the cumulative financial challenges faced by the company.
The depreciation of the Pakistani rupee has intensified the crisis, imposing an additional burden of PKR 88.84 billion on the government’s financial landscape. Despite the colossal nature of these outstanding dues, PSO has only managed to collect a mere PKR 10 billion in payments over the past month, signaling a critical liquidity crunch that threatens the company’s ability to maintain essential operations.
As PSO navigates these tumultuous financial waters, the urgency for a resolution becomes increasingly apparent. Effective measures to recover outstanding debts are imperative not only for the survival of PSO but also for ensuring the stability of Pakistan’s national oil supplier. The ramifications of this crisis extend beyond the company itself, potentially destabilizing the broader energy sector and adversely impacting the country’s economic framework.
Stakeholders and government officials are now under immense pressure to devise and implement strategies that can alleviate PSO’s financial distress. The future of Pakistan’s energy security and economic health may well hinge on the swift resolution of the challenges facing its state-owned oil giant.
