The National Refinery Limited (NRL) has decided to suspend the supply of fuel to Pakistan State Oil (PSO) due to the state-owned oil marketing company’s failure to make payments to the refinery.
PSO has encountered a severe financial crisis, leading to outstanding payments owed to various sectors as a result of the supply of petroleum products.
The amount owed to NRL by PSO is currently Rs3.469 billion. NRL has conveyed its decision to stop the supply of fuel to PSO in writing, according to a report by a national daily.
Notably, PSO has recently stopped making payments to refineries, including those that supply diesel, gasoline, aviation fuel, furnace oil, and other petroleum products to the state-owned company.
As per the company’s receivables, Sui Northern Gas Pipelines Limited (SNGPL) is the largest defaulter of PSO, with an outstanding amount of Rs492.102 billion as of March 8, 2023. In response, the Economic Coordination Committee of the cabinet has authorized a sovereign guarantee of Rs50 billion in favor of SNGPL for commercial borrowing on an immediate basis to meet PSO’s liquidity requirement.
The power sector remains a significant source of difficulty for the state-owned oil marketing company, with outstanding payments of Rs178 billion, followed by Pakistan International Airlines (PIA) and the government of Pakistan, both of which owe PSO Rs92.5 billion. The total receivables, which have risen to Rs762.653 billion, include the most critical payment of Rs124.666 billion in late payment surcharge (LPS).
