ISLAMABAD: The Pakistan State Oil (PSO) has proposed the imposition of a levy of upto Rs4 per litre on Jet-A1 to recover outstanding receivables from Pakistan International Airlines (PIA), well-informed sources told Business Recorder.

Sharing the details, recently, the Board of Management (BOM) of the PSO was informed that as at January 31, 2024, the principal amount receivable from PIA is Rs15.8 billion with LPS of Rs11.9 billion, summing up to Rs21.7 billion.

It was informed that the Federal Cabinet in its meeting held on August 09, 2023, approved the inclusion of PIACL in the Active Privatization Programme.

Under the PIA revival plan, a new holding company will be registered with the SECP and all the assets as well as liabilities of the national carrier will be transferred to the new holding company.

Then PIA will be incorporated into the holding company as a debt-free subsidiary company.

The sources said the BOM was apprised that in August 2023, the management had shared its concerns with the Petroleum and Finance Divisions with a copy to Chairman BOM. A reply from the DG Privatisation Commission on January 30, 2024, sought the PSO’s views and comments on the proposed parking of PSO’s liabilities in the holding company.

The BOM, sources said, was informed that a reply has been sent, wherein, the PSO has disagreed with the proposal of parking its legitimate receivables in a holding company since it is not only difficult for PSO being a public listed company but is also a severe detriment to the company’s interests.

Furthermore, the correct figure of receivables from the PIACL has been apprised along with the expression of willingness to explore viable options and negotiate a settlement of outstanding dues including; (i) cash; (ii) Pakistan Investment Bonds (PIBs); (iii) percentage of equity share in the liability-free new company; and (iv) asset transfer, the sources added.

MD and CEO Amir Hayat added that the option of imposing Rs3-4/litre levy on Jet-A1 has also been suggested to MoE-PD.

The sources said, BOM concurred and unanimously endorsed/approved management’s decisions of (a) not agreeing with the proposal of parking PSO’s legitimate receivables in a holding company and (b) exploring viable options and negotiating a settlement of outstanding dues against cash, PIBs, percentage of equity share, asset transfer or imposition of a levy on Jet-A1.

Copyright Business Recorder, 2024