PSO's circular debt of Rs 145 billion: 'tariff rationalisation only recipe to overcome crisis'

Minister for Petroleum and Natural Resources, Syed Naveed Qamar told National Assembly on Tuesday that 'tariff rationalisation' was the only recipe he could offer to overcome Pakistan State Oil (PSO) circular debt of Rs 145 billion.
"It is a fact that PSO's financial condition has been adversely affected by the circular debt of Rs 145 billion and it requires massive injection of funds. We are considering floating bonds to this effect and to do away with the subsidy as well," said Qamar referring to a similar situation when government had brought circular debt to zero through injection of Rs 90 billion in 2009.
The issue was highlighted by four members of the opposition through a call-attention notice that sought a policy statement from the minister on how to improve the financial health of PSO. Giving breakup of the circular debt, Qamar said Rs 131 billion was outstanding against power sector and Rs 14 billion was the result of price differential and urged lawmakers to help government rationalise tariff. "We have to address the issue seriously, otherwise we would not be in a position to buy oil in future", he said.
As on Tuesday, PSO's receivables against different clients were as follows: WAPDA Rs 45.5 billion, Hubco Rs 62.15 billion, Kapco Rs 24.1 billion, PIA Rs 990 million, OGDC Rs 319 million, KESC Rs 1.727 billion, financial charges from PIA Rs 960 million, price differential claims (PDC) on High Speed Diesel (HSD) Rs 1.38 billion and PDC on imported PMG Rs 5.35 billion. PSO is to pay Rs 125.8 billion to local as well as international fuel suppliers.