Pakistan State Oil (PSO) despite difficult conditions in the country maintained a turnover of Rs 222 billion in the first quarter maintaining the overall market share of 71.3 percent with a market share of 60.2 percent and 85.2 percent in white and black oil respectively.
This was stated by Kalim Siddiqui, Managing Director, Pakistan State Oil while briefing the media here on Tuesday. He said that the extraordinary external factors including foreign exchange and inventory losses led oil marketing companies and the refineries to report losses in the first quarter of FY09.
He highlighted that the average Opec crude oil price for the FY-08 was $1l4/bbl while the spot on price as of October 23, 2008 is reported to be $60.27/bbl. To further explain the impact of external factors, he presented PSO's Profit and Loss statement without foreign exchange and inventory losses which stated a profit after tax of Rs 3.53 billion.
He further highlighted the key issues facing the largest oil marketing company importing approximately 80 percent of fuels, which includes the circular debt of Rs 72 billion which has led PSO to delay the payment to refineries.
Kalim Siddiqui explained that the circular debt primarily was caused due to non-payment of Hubco, Wapda, Kapco, PIA and the Price Differential Claim (PDC) accumulated with the government. The circular debt has compelled the company to take financial assistance at high interest rates from the banks resulting in payment of over Rs 1 billion as financial cost on borrowing, he added.
He pointed out that the PSO's receivables from Wapda had increased to Rs 17 billion, which are currently Rs 12 billion, from Hubco Rs 34 billion, from Kapco Rs 11 billion and from PIA that amount is Rs 4 billion. On the other hand, PSO's delayed payments to refineries were Rs 66 in September 2008 and currently it has increased to Rs 71 billion.
He mentioned that the government is aware of the liquidity crunch faced by PSO and is taking all possible measures to facilitate the company. He said the media that the government has ensured the payment of PDC at the rate of Rs 600 million/day to pay off the current accumulation of Rs 12 billion in the next few days. On October 21, 2008 the government of Pakistan paid Rs 8.34 billion on account of PDC and another 5 billion on October 27, 2008 to offset dues from power companies.
He underscored the importance of immediate resolution of circular debt to effectively plan the future imports of POL products and continue the supply of fuel to the country. He thanked the media for their support in this difficult time.
Comments
Comments are closed.