ISLAMABAD: Pakistan State Oil Company Limited’s (PSOCL’s) circular debt has reached around Rs600 billion including Rs180 billion of the power sector till the end of calendar year 2022.
Due to the substantial rise in circular debt receivables related to gas throughout the winter, the security of the country’s supply chain is under jeopardy. The oil and gas industry has a total circular debt of Rs. 1,500 billion.
The obligations include paying refineries and satisfying Rs236 billion in letters of credit requirements for the import of diesel.
According to the receivables and payables data of the PSO, Sui Northern Gas Pipeline Limited (SNGPL) is the biggest defaulter, owing the oil marketing company around Rs394 billion. Finance Minister Ishaq Dar had constituted a committee on circular debt settlement plan for gas sector companies. According to the Terms of Reference (TORs), the committee would undertake a detailed mapping of gas sector circular debt (CD) stock as of 30th June 2022, segregating principal amount of debt, LPS, penalties and LDs among the under-reference public sector entities of petroleum and power sectors.
Following gas sector, GENCOs and the Central Power Purchase Agency (CPPA) in the power sector are required to offload the amount of Rs146.536 billion. Hubco has to pay Rs25 billion, Kapco that owes Rs6 billion, and Pakistan International Airlines (PIA) owes to oil company Rs13 billion.
Federal government owes PSO Rs8.9 billion in the head of exchange price differential and Rs13.86 billion under the head of exchange rate differential on FE 25 loan.
