PSO’s receivables swell to Rs425 billion
The receivables of state-owned oil marketing company Pakistan State Oil (PSO) have continued to swell, reaching Rs425.446 billion by the end of 2021.
Earlier, power producers were the major defaulters but now liquefied natural gas (LNG) supplies have also caused trouble for PSO whose finances are under strain.
PSO imports LNG from Qatar on a “take-or-pay” basis and provides it to gas utilities for onward supply to consumers.
Under the government policy, the imported gas should be consumed by commercial, industrial and power sectors. It has never been imported for consumption by domestic consumers.
However, due to the depletion of domestic gas reserves, the government has diverted LNG to the residential consumers in the current winter as had been done in the past as well.
However, there is no mechanism in place to recover the cost of imported gas from the domestic consumers. As a result, the bills have continued to swell in the absence of a legal framework.
Public gas utilities also continue to divert gas to the residential consumers in the winter season. Of the two utilities, Sui Northern Gas Pipelines Limited (SNGPL) has to recover over Rs100 billion from such consumers.
Despite the record high receivables, PSO has made profit primarily due to inventory gains in the wake of rising oil prices.
Power producers were the major defaulters as they have to pay Rs184.8 billion to PSO on account of oil supplies. Independent power producers (IPPs) also owe a huge amount.
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Hub Power Company has to pay Rs38.9 billion to PSO while Kapco owes Rs5 billion. Apart from these, Genco has to pay Rs140.7 billion including late payment surcharge.
PSO is to receive Rs22 billion from Pakistan International Airlines (PIA) and the government of Pakistan.
The government has to pay Rs9.7 billion on account of price differential claims while PSO has to receive another Rs7.9 billion on account of exchange loss on an FE-25 loan.
PSO has dominated the energy landscape, registering a growth of 21.9% in liquid fuels with volumes reaching 9.2 million tons and market share standing at 46.3% in financial year 2021 compared to 44.3% in financial year 2020.
It reported an all-time high net profit of Rs11.9 billion in the first quarter of current fiscal year 2021-22.
Published in The Express Tribune, January 1st, 2022.
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