PSO faces mounting receivables of Rs858bn by end-2024

KARACHI: Pakistan State Oil (PSO), the state-owned oil marketing company (OMC), entered 2025 burdened with significant receivables, which surged to an alarming Rs858 billion by the end of 2024.

As of June 2024, PSO’s total receivables stood at Rs810 billion. However, these continued to grow, reaching Rs858 billion by December 2024, driven primarily by its involvement in liquefied natural gas (LNG) imports. PSO, a key importer of LNG from Qatar, supplies the fuel to Sui Northern Gas Pipelines Limited (SNGPL) to meet consumer demand, but outstanding dues from SNGPL have reached critical levels.

The company’s financial challenges are largely attributed to these mounting receivables. According to figures obtained by The News, SNGPL is PSO’s largest debtor, owing Rs542 billion, including Rs269 billion in overdue payments.

The power sector is the second-largest defaulter, with total outstanding dues of Rs161 billion. Within this sector, state-owned generation companies owe Rs158 billion, while Kot Addu Power Company (Kapco) owes Rs3.5 billion.

Other significant liabilities include dues from Pakistan International Airlines (PIA) and the government of Pakistan. PIA owes PSO Rs29.5 billion, while the government’s obligations amount to Rs1.8 billion under a price differential claim from 1996-2014 and Rs58 billion on exchange rate differentials tied to the FE-25 loan. The government is responsible for exchange rate losses since PSO borrows dollars to finance these transactions, incurring interest costs. PSO is also awaiting Rs65 billion in sales tax refunds from the Federal Board of Revenue (FBR).

Despite these challenges, PSO retained its position as the market leader in the oil sector. In December 2024, PSO’s market share in high-speed diesel (HSD) and motor spirit (MS) stood at 45.99 per cent and 40.54 per cent, respectively. However, its overall market share declined from 51 per cent in November 2024 to 45 per cent in December, primarily due to a decrease in HSD market share.

For the financial year ending June 30, 2024, PSO reported a net profit of Rs19.6 billion, while its net sales rose by nearly 6.0 per cent to Rs3.74 trillion, compared to Rs3.54 trillion in the same period of the previous year.

The payables of PSO amounted to Rs48.5 billion by the end of 2024. PSO has to pay Rs32 billion to Pak Arab Refinery Limited (Parco), Rs9 billion to Pakistan Refinery Limited, Rs1 billion to National Refinery and Rs6 billion to Attock Refinery.