Wednesday, June 29, 2022

PSO circular debt closes up to Rs1 trillion mark

ISLAMABAD: In the midst of rapidly bleeding economy and rising uncertainty on account of PTI Long March, the state owned Pakistan State Oil (PSO) has virtually landed in hot water with its circular debt skyrocketing to a whopping Rs939.838 billion, just over Rs60 billion short of Rs1 trillion mark.

The receivables of PSO have jacked up to Rs591.665 billion with payables at Rs348.173 billion, data about key receivables and payable position of the entity as of May 22, 2022 showed on Wednesday.

“This has triggered a further worsening liquidity crunch for the PSO making it unable to perform its functions smoothly,” a senior PSO official told The News.

As per the data available with The News, Sui Northern Gas Pipeline Limited (SNGPL) continued to emerge as the biggest defaulter that owes PSO a huge amount of Rs311.166 billion in the head of imported products of LNG. Out of Rs311.166 billion, SNGPL is also required to pay Rs6.754 billion.

Power sector is the second biggest defaulter of PSO, as according to details it owes Rs177.406 billion.

Data shows that electricity generation companies (GENCOs) or Central Power Purchasing Agency (CPPA) have to pay Rs145.424 billion. HUBCO is also required to pay PSO Rs21.624 billion and KAPCO Rs10.359 billion. Out of Rs177.406 billion, the amount in the head of late payment surcharge stands at Rs33.153 billion.

The national flag carrier—Pakistan International Airlines (PIA) has also become a permanent headache for PSO by defaulting on a payment of Rs22.981 billion.

The story does not end here as PSO was required to pay Rs8.934 billion under price differential claims from the government of Pakistan during 1996-2014.

However, the government of Pakistan has to pay PSO an amount of Rs45 billion due in financial year 2022 under the head of price differential claims. More importantly, the government also needs to pay an outstanding amount of Rs24.660 billion under the exchange rate differential head on FE 25 loan.

Coming to payables, the latest data showed that payables of PSO have increased to Rs348.173 billion, out of which it needs mammoth amount of Rs306.318 billion to avoid defaults in opening LCs for importing fuel from Kuwait Petroleum Company and stand by letter of credits for import of LNG. And if PSO fails to pay the said amount, it might default and would not be able to import fuel and LNG too.

The data also showed that PSO owes the country’s refineries Rs41.855 billion. PSO is required to pay Rs24.435 billion to Pak-Arab Refinery Company (PARCO), Rs6.534 billion to Pakistan Refinery Limited (PRL), Rs4.636 billion to National Refinery Limited (NRL), Rs4.839 billion to Attock Refinery Limited (ARL) and Rs1.411 billion to ENAR.

Source: The News

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