LAHORE: Pakistan State Oil (PSO) receivables from power sector are Rs186 billion, according to Managing Director Amjad Pervaiz Janjua.
“Actually it is a unilateral buildup and not a circular debt that has piled up and may affect some future projects of the company if not cleared for long,” said Mr Janjua at a corporate briefing arranged by the Lahore Stock Exchange on Wednesday.
Under the agreement with private power producers, it was not mandatory for PSO to supply oil on credit.
Know more: PSO profit soars 73pc
“The agreement says the private power producers would pay in advance and then get oil shipments, but the PSO is bearing the burden in the national interest by purchasing oil from its own resources and then supplying it on credit to various sectors,” said Mr Janjua.
The situation has started improving as power producers have joined hands with the PSO to get the receivables cleared.
Furthermore, consumption of furnace oil has also decreased as a drop in mercury has reduced power demand.
The government recently released Rs20bn while efforts were under way to get all the receivables cleared at the earliest.
“No time-frame can be given as to when this debt would be cleared as we have got no assurance from the quarters concerned. We demand that all receivables from private power sector and government be cleared to streamline our operations,” said the managing director.
The company has to pay Rs12bn to refineries while receivables from PIA have reached Rs10bn. The overall payables stood at Rs88bn and the company borrowed Rs106bn on Sept 7 this year from banks to clear the deficit, said Mr Janjua.
To a question, the managing director said that the privatisation of PSO was not on the cards.
“The company is on the privatisation list, but we have, so far, received no signal from the government. We do not expect company’s privatisation process to begin in the near future,” said Mr Janjua.
Earlier, PSO Deputy Managing Director (Finance and IT) Sohail Ahmad Butt said all the benchmarks of company went up in 2014 fiscal year.
The company posted a turnover of Rs1.4 trillion in FY2014, the highest ever and 9 per cent more than the corresponding period.
Mr Butt said that the market share of PSO in 2013-14 fiscal year dropped to 62pc from 64pc in the corresponding year, but its volumes increased by 5pc.
The market capitalisation of the company stood at Rs106bn for FY 2014, 34pc more than the corresponding year. The company contributed Rs289bn to the national exchequer.
“The company has joined the Rs100bn club and from investment point of view, it is the best time to invest in PSO as shares currently are undervalued,” said Mr Butt.
Published in Dawn, September 18th , 2014
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