ISLAMABAD: The accumulated receivable of state-owned Pakistan State Oil (PSO) has reached Rs27.512 billion including late payment charges against Pakistan International Airlines (PIA) till December 7, 2023.

Recently, the PSO suspended fuel supplies to the PIA over a dispute regarding unpaid dues.

As a result of this standoff, the PIA was compelled to cancel domestic and international flights leading to inconvenience for hundreds of passengers. Now the PIA had suspended its flights to loss making domestic destinations to minimise the financial losses.

PSO restores fuel supply to at least 20 PIA flights

Total receivables of PSO have reached all time high to Rs788.274 including late payment changes of Rs173.228 billion.

According to PSO, around 90 percent of its funds were entangled in unpaid dues from gas company the Sui Northern Gas Pipelines Ltd (SNGPL), which alone owed a substantial backlog of about Rs504.681 billion.

As of the latest available data, the total receivables from various entities reached an alarming Rs788. 274 billion, with principal dues accounting for Rs565.114 billion which includes approximately Rs105.776 billion in late payment surcharge and Rs6.754 billion exchange rate gain/ loss (LNG).

Consequently, the PSO’s payables to international suppliers of oil products and liquefied natural gas (LNG) are over Rs210 billion in current winter.

The power sector is also a significant contributor to PSO’s financial woes, with outstanding dues of Rs184.867 billion. This includes Rs150.939 billion owed to public sector generation companies and the Central Power Purchasing Agency (CPPA). Hubco has outstanding dues of Rs28.928 billion, and KAPCO’s dues amount to Rs5 billion.

The government’s unpaid obligations have further led to PSO’s escalating payables in the form of letters of credit and standby letters of credit to Kuwait Petroleum and Qatar Petroleum for petroleum products and LNG imports. Additionally, the company owes refineries considerable payables.

Copyright Business Recorder, 2023