Pakistan State Oil (PSO) is facing a severe financial crisis, with outstanding dues across various sectors reaching a staggering Rs786 billion. The company’s financial woes are exacerbated by the delay in privatization and the depreciation of the Pakistani rupee.
The largest debtor is Sui Northern Gas Pipelines Limited (SNGPL), owing Rs506 billion for LNG supplies. The power sector’s dues have also surged past Rs186 billion, while Pakistan International Airlines (PIA) has yet to settle Rs28.75 billion in dues owed to PSO.
Despite these massive outstanding debts, only Rs10 billion has been paid to PSO in the past month. The government’s decision to postpone the privatization of major state-owned energy entities, including PSO, has added to the uncertainty.
The Petroleum Division has submitted a summary to the Cabinet Committee, highlighting several challenges that must be addressed before proceeding with privatization. A key concern is the potential impact on existing LNG agreements if PSO is privatized.
The government must thoroughly evaluate these complexities and take a well-informed decision regarding the privatization of PSO and other energy entities.
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