PSO claims climb to 398 billion rupees


ISLAMABAD: Pakistan State Oil (PSO) claims reached the huge figure of Rs 398 billion, the highest ever recorded in the history of the entity, with a significant share of Rs 192.539 billion coming from the sector of electricity.

However, Sui Northern owes Rs 161.025 billion to the PSO at the head of RLNG and the PIA is required to pay Rs 21.979 billion for the use of jet fuel. The non-recovery of Rs 398 billion in receivables triggered an increase in the cash flow situation, causing financial hardship for the public entity.

The worsening cash flow situation made the PSO very difficult to time to repay the amount of Rs 124 billion required to open Letters of Credit (L / C) for the Kuwait Petroleum Company and Standby Letter of Credits (SBLC ) for importing LNG. It also made the PSO unable to pay the sum of Rs 32 billion to 6 refineries.

In the electricity sector, power generation companies (GENCO) and the Central Power Purchase Agency (CPPA) are required to pay Rs 140,886b as of November 15, 2021. HUBCO owes Rs 43.188 billion and KAPCO Rs 8.465 billion to the PSO. The inefficient electricity sector has to pay the huge amount of Rs 74.372 billion at the head of the late payment surcharge (LPS) which is no less than a penalty. Due to the importation of RLNG and the non-recovery of the cost, the receivables jumped to Rs 161.025 billion which must be paid by the SNGPL.

The deterioration of the exchange rate at the top of LNG imports also caused a loss of Rs 6.585 billion. The data revealed that the PIA’s receivables amounted to Rs 21.979 billion.

The PSO is to be paid Rs 10.161 billion by the government of Pakistan in price differential claims. The entity absorbed the loss of Rs 5.3 trillion as a result of the exchange rate differential on the FE 25 loan. And due to non-payment on time, the late payment surcharge increased to Rs 7.730 billion. The data also indicates that the debts of the PSO to six refineries increased to Rs 32.101 billion.

The PSO on November 15, 2021 is required to pay Rs 16.836 billion to PARCO (Pak Arab Refinery Company), Rs 4.931 billion to PRL (Pakistan Refinery Limited), Rs 3.984 billion to NRL (National Refinery Limited), Rs 3.848 billion at ARL (Attock Refinery Limited), Rs 1.100 billion at BYCO and Rs 1.403 billion at ENAR.

The circular debt due to the perpetual injection of expensive RLNG into the domestic sector over the past three years has jumped to Rs 104 billion and if this time the government is again providing RLNG to the domestic sector in Punjab and KP for three months over the next winter. season, it will swell alarmingly to Rs 190 billion.

“The diversion of RLNG to the domestic sector would be a government decision during the next winter season, which is why the Petroleum Division has decided to ask the Finance Division to grant relief of Rs 50 billion to the PLL and at the PSO.

Otherwise, they will go bankrupt because of the zero clawback of RLNG contributions from the national sector, ”a senior energy ministry official told The News.

The embezzlement of RLNG was initiated by the government for political considerations during the winters of the years 2018-19, 2019-20, 2020-21, causing the accumulation of the circular debt of Rs 104 billion.

If the government continues to inject it during the next winter season, the circular debt in RLNG will worsen and rise to Rs 190 billion. The cost of RLNG has not been recovered so far, so public entities namely Pakistan LNG Limited (PLL) and Pakistan State Oil (PSO) have started to feel the heat and they are short of cash. due to the lack of recovery of the cost of imported products diverted to the domestic sector.

For the current month of the season, the current price of RLNG in the country is $ 15.78 per MMBTU. And if the spot freight price is between $ 30 and $ 35 per MMBTU during the winter season, it is estimated that the PLL will suffer another drop of Rs 90 billion. The official said that RLNG has been defined as an oil product, not gas, and for OGRA it is not possible to recover the cost of RLNG from domestic consumers.

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