Pakistan State Oil Faces Financial Turmoil with PKR 800 Billion Receivables
Pakistan State Oil is grappling with a financial crisis as its receivables reach PKR 800 billion, largely due to outstanding debts from major clients, notably Sui Northern Gas Pipelines Limited. Despite seeking government funding, the crisis endangers PSO's profitability and the broader energy sector.
- Country:
- Pakistan
Pakistan State Oil, the country's leading oil supplier, is confronting an escalating financial crisis as its receivables have soared to PKR 800 billion, significantly impacting its profitability, as reported by ARY News.
The largest contributor to this financial quagmire is Sui Northern Gas Pipelines Limited, which owes PSO a staggering PKR 515.28 billion. Other major debts include PKR 14.80 billion from Hub Power Company Limited and various other energy sector entities owing PKR 189 billion. Pakistan International Airlines also owes PSO PKR 29.25 billion, further exacerbating the company's financial woes. The situation is compounded by PSO's financial obligations to local refineries for imported petroleum products. In a bid to stabilize operations, PSO has requested PKR 50 billion in funding from multiple government ministries.
Reports indicate that Pakistan's import bill for re-gasified liquefied natural gas has surpassed PKR 506 billion, directly impacting outstanding dues from SNGPL. Debts from the power sector have also risen to over PKR 186 billion, and PIA's debt stands at approximately PKR 28.75 billion. The ongoing depreciation of the Pakistani rupee has further strained the government's financial commitments by an additional PKR 88.84 billion.
Despite the staggering amount of unpaid dues, PSO has managed to collect only PKR 10 billion in the last month, highlighting a severe liquidity crisis, according to ARY News. The urgency for resolution is critical as PSO navigates these turbulent financial waters. The crisis not only threatens PSO's stability but also poses significant risks to the broader energy sector and the national economy.
(With inputs from agencies.)