SNGPL and Pak Arab Fertlizers owe Rs 17.8b to PSO, however, biggest defaulter of PSO is still the power sector that needs to pay Rs 194b
The state-owned Pakistan State Oil (PSO) is still languishing in the ocean of financial miseries that seem to continue unabated as its receivables have surged to Rs 235.4 billion, a report in the local media said on Saturday.
According to the report, the government’s oil marketing company has further started braving more losses because of the import of LNG as the failure in recovery of the LNG arrears has emerged as the biggest inefficiency of the government of the day under the existing scenario.
According to payables and receivables position of the said government entity, as of September 9, 2015, the Sui Northern and Pak Arab Fertlizers owe Rs17.8 billion to PSO. However, the biggest defaulter of the PSO is still the power sector that needs to pay Rs194 billion.
The PSO also needs to recover the arrears of Rs 14.2 billion from the Pakistan International Airlines (PIA) and Rs 9.6 billion from the government in the head of price differential claims.
However, the company needs to pay Rs 23 billion to refineries and Rs 40 billion are also desired to be paid to maintain L/Cs and ensure the payments to the Kuwait Petroleum Company.
An official said the PSO was going into another trap of circular debt because of the LNG import and the failure in recovery of its arrears. The LNG payments are stuck up mainly because of the non-existence of the tripartite agreement between PSO, Sui Southern and Sui Northern and on top of that there exists no LNG sale price in the country and therefore, it has become mission impossible to bill those who have used the RLNG.
Owing to this very fact, the official argued, the signing of LNG deal with Qatargas Company for smooth supply in the country is in the doldrums. Now the situation on tripartite agreement between the three entities have further aggravated after prime minister sacked SNGPL MD Arif Hameed over non-compliance of the government directions in finalising the agreement. In the meanwhile, Lahore High Court (LHC) restored the sacked managing director which also irked the government.
The government in haste convened the board of directors meeting of Sui Northern to topple the managing director, but failed to do so as the majority of the members of the board refused to subscribe the viewpoint of the government. Now the case of the managing director will be resolved in the LHC and no one can predict for how long the legal battle between the government and managing director of the gas utility will linger on.
The fact is that the advancement, the official explained, on the tripartite agreement had been virtually stalled. It is pertinent to mention that Qatargas Company had given the deadline of September 30 to the government of Pakistan to resolve all the issues including the tripartite agreement and payment mechanism. It seems that the government may not be able to resolve the issue.
In addition Ogra has asked PSO, SUI Southern and Sui Northern to provide the invoices of consignments in importing LNG vetted by Ministry of Petroleum and Natural Resources so that the regulator could determine the LNG sale prices.
“Unless and until the said issues are resolved, the recovery of the huge payment will be impossible. This will add to the financial miseries of Pakistan State Oil.”
