The State Oil (PSO) is facing a severe financial crisis in Islamabad, with total receivables reaching an alarming level of PKR 800 billion. This crisis is primarily a result of outstanding payments from major clients, with Sui Northern Gas Pipelines Limited (SNGPL) being the largest debtor owing PKR 515.28 billion. Other significant debts include PKR 14.80 billion from Hub Power Company Limited (Hubco) and PKR 189 billion from various entities in the energy sector. Pakistan International Airlines (PIA) also adds to PSO’s financial woes with a balance of PKR 29.25 billion. To address its growing financial challenges, PSO has requested PKR 50 billion in funding from multiple government ministries.
The import bill for re-gasified liquefied natural gas (RLNG) has exceeded PKR 506 billion, impacting SNGPL, which owes the same amount to PSO for LNG supplies. Dues from the power sector have also climbed to over PKR 186 billion, with PIA’s debt standing at approximately PKR 28.75 billion. The depreciation of the Pakistani rupee has added to the financial burden, imposing an extra PKR 88.84 billion on the government. Despite the significant outstanding dues, PSO has only received a small amount of PKR 10 billion in payments over the past month, highlighting a critical liquidity crisis for the company.
As PSO grapples with these financial challenges, there is an urgent need for effective measures to recover outstanding debts and stabilize the operations of the national oil supplier. The impact of this crisis extends beyond PSO, potentially affecting the broader energy sector and the country’s economic landscape. Addressing the financial strain on PSO is crucial to ensuring the stability of the energy sector and safeguarding the national oil supply. With the growing urgency for resolution, timely intervention is essential to navigate the turbulent financial waters and secure a sustainable future for PSO and the wider energy industry in Pakistan.
In response to the escalating debt and financial crisis, PSO has sought financial assistance from government ministries to bolster its operations and address the mounting receivables. The company’s profitability has been significantly impaired by the outstanding payments from major clients, particularly SNGPL, Hubco, various entities in the energy sector, and PIA. The request for PKR 50 billion in funding reflects the gravity of the situation and the need for immediate action to secure the financial stability of PSO and prevent further deterioration of the company’s financial health.
The increasing debts from major clients and the import bill for RLNG have further strained PSO’s financial position, exacerbating the liquidity crisis faced by the company. The depreciation of the Pakistani rupee has added to the financial burden, underscoring the challenges faced by PSO in navigating the complex economic landscape. As the national oil supplier grapples with these financial challenges, there is a pressing need for effective debt recovery measures and financial support to mitigate the impact on the broader energy sector and the country’s economy. The resolution of the financial crisis faced by PSO is critical to ensuring the stability of the energy industry and safeguarding the national oil supply in Pakistan.
