ISLAMABAD: Rising with each passing day, the receivables of Pakistan State Oil — the country’s largest firm by revenue — have crossed a record Rs755 billion by Monday or about 21pc of its annual revenue, virtually halting its strategic business expansion.

In its latest report of its financials submitted to the federal government, the country’s largest fuel supplier reported that almost 90pc of its funds had been stuck up with the government entities led by Sui Northern Gas Pipelines Ltd (SNGPL) with a backlog of about Rs478bn.

The state-run fuel supplier occupies more than 50pc market share in various petroleum products while about 49pc share is jointly held by more than five dozen oil marketing companies. Its market share has been rising in recent years because of volatile prices and reluctance by other companies to maintain required fuel stocks.

It said the total receivables from various entities stood at Rs754.51bn on the close of Sunday (Oct 15), of which principal dues amounted to Rs531.4bn. As a consequence, PSO’s payables to international suppliers of oil products and liquefied natural gas (LNG) had gone beyond Rs231bn. Its total payables amounted to Rs292bn on Oct 15, including more than Rs60bn to local refineries.

The company had reported last fiscal year to have burned about Rs40bn profitability to financing costs to keep its operations rolling amid massive non-payment, chiefly by the public sector entities. Among others, this was the key reason for the PSO’s total profit declining to just Rs9.3bn in FY23 on a total turnover of about Rs3.6 trillion compared to over Rs91bn profit over Rs2.7tr in FY22.

The company reported that total receivables from SNGPL stood at about Rs478bn on October 16 including about Rs115bn on account of late payment surcharge and about Rs361bn dues on account of LNG supplies.

Another big chunk of Rs185bn stood outstanding against the power sector including Rs151bn to public sector generation companies and the Central Power Purchasing Agency (CPPA). In addition, dues from Hubco stood at Rs29bn and from Kapco these stood at Rs5bn. The receivables due from the government and As a result, the PSO’s payables on account of letters of credit and standby letters of credit to Kuwait Petroleum and Qatar Petroleum against petroleum products and LNG imports now exceeded Rs231.4bn. In addition, payables to refineries stood at Rs60bn with a major Rs32.4bn payable to Parco.

Published in Dawn, October 17th, 2023