PSO to get only Rs5b against Rs295b debt pile
Wants immediate release of Rs105b to clear its current bills
PHOTO: RIAZ AHMED/EXPRESS
ISLAMABAD:
As cash-strapped Pakistan State Oil (PSO) faces financial crisis due to swelling receivables amounting to Rs295 billion, the Ministry of Finance is considering releasing a thin amount to tackle the debt pile.
According to officials, PSO has demanded immediate release of Rs105 billion to improve cash flow and make payments to oil suppliers.
PSO set to offer branchless banking services
Earlier, the Ministry of Water and Power approached the prime minister, saying the finance ministry had not released Rs104 billion out of the total allocated energy subsidy of Rs118 billion for the ongoing financial year 2016-17.
As a result, the finance ministry agreed, in principle, to release the remaining amount of Rs104 billion.
A senior government official said power producers were major defaulters of PSO, which had to pay Rs257 billion. To ease PSO's woes, the petroleum ministry has knocked the doors of several government departments for help.
In addition to seeking prime minister's intervention, the petroleum ministry has also asked the water and power ministry to clear outstanding bills of the state-owned oil marketing company for fuel supplies.
According to the official, the prime minister had promised to address PSO's debt problem after returning from a trip to China.
However, despite efforts the finance ministry is in the process of releasing only Rs10 billion for the Central Power Purchasing Agency (CPPA), but PSO is expected to receive even less - Rs5 billion.
The official said water and power and petroleum ministries had reached an understanding that power producers would pay all current dues against fuel supply by PSO, but the amount reached a staggering Rs50 billion.
As a result, PSO wants immediate release of Rs105 billion to clear its current bills and make payments to international fuel suppliers.
"At present, PSO is running its business by borrowing from banks and bill receipts through white oil sales," the official said. "However, it has utilised all credit lines available with banks."
PSO switches from loss to profit, earns Rs4.14 billion
The current PML-N government had cleared the circular debt of Rs480 billion after coming to power in mid-2013. However, despite being in power for four years, it has failed to address the energy deficit.
PSO was due to receive Rs257 billion from power companies, Rs15 billion from Pakistan International Airlines, Rs9.6 billion from the government on account of price differential claims and Rs11.9 billion from Sui Northern Gas Pipelines on account of LNG supply.
Published in The Express Tribune, May 20th, 2017.
As cash-strapped Pakistan State Oil (PSO) faces financial crisis due to swelling receivables amounting to Rs295 billion, the Ministry of Finance is considering releasing a thin amount to tackle the debt pile.
According to officials, PSO has demanded immediate release of Rs105 billion to improve cash flow and make payments to oil suppliers.
PSO set to offer branchless banking services
Earlier, the Ministry of Water and Power approached the prime minister, saying the finance ministry had not released Rs104 billion out of the total allocated energy subsidy of Rs118 billion for the ongoing financial year 2016-17.
As a result, the finance ministry agreed, in principle, to release the remaining amount of Rs104 billion.
A senior government official said power producers were major defaulters of PSO, which had to pay Rs257 billion. To ease PSO's woes, the petroleum ministry has knocked the doors of several government departments for help.
In addition to seeking prime minister's intervention, the petroleum ministry has also asked the water and power ministry to clear outstanding bills of the state-owned oil marketing company for fuel supplies.
According to the official, the prime minister had promised to address PSO's debt problem after returning from a trip to China.
However, despite efforts the finance ministry is in the process of releasing only Rs10 billion for the Central Power Purchasing Agency (CPPA), but PSO is expected to receive even less - Rs5 billion.
The official said water and power and petroleum ministries had reached an understanding that power producers would pay all current dues against fuel supply by PSO, but the amount reached a staggering Rs50 billion.
As a result, PSO wants immediate release of Rs105 billion to clear its current bills and make payments to international fuel suppliers.
"At present, PSO is running its business by borrowing from banks and bill receipts through white oil sales," the official said. "However, it has utilised all credit lines available with banks."
PSO switches from loss to profit, earns Rs4.14 billion
The current PML-N government had cleared the circular debt of Rs480 billion after coming to power in mid-2013. However, despite being in power for four years, it has failed to address the energy deficit.
PSO was due to receive Rs257 billion from power companies, Rs15 billion from Pakistan International Airlines, Rs9.6 billion from the government on account of price differential claims and Rs11.9 billion from Sui Northern Gas Pipelines on account of LNG supply.
Published in The Express Tribune, May 20th, 2017.