ISLAMABAD: Pakistan State Oil (PSO) has issued a Save Our Soul (SOS) letter, which has raised alarm within the Petroleum Division which has urged both SSGCL and SNGPL to arrange commercial borrowing to address the overdue payments.
In a letter dated January 13, 2025, to the relevant stakeholders, Muhammad Usman of the Petroleum Division’s Gas section referred to a previous communication from February 21, 2024. The earlier letter had emphasized the urgent need to resolve inter-company financial issues, warning that failure to do so would hold the Sui companies fully accountable for any disruptions in the supply chain or defaults.
PSO’s receivables have now surpassed Rs 800 billion, owed by various public sector entities. Despite repeated efforts, the company has been unsuccessful in recovering these amounts.
“It is of grave concern that, despite sufficient time and repeated escalations, the pending gas cost equalization arrangement between SNGPL and SSGC has not been finalized,” said the Gas Expert in the letter available with Newzshewz.
The Petroleum Division highlighted that the continued delay has significantly worsened PSO’s liquidity issues, jeopardizing the uninterrupted supply of petroleum products. PSO has already informed authorities that it is unable to make payments to international suppliers due to the shortfalls caused by unresolved inter-company obligations. While the Ministry of Energy (Petroleum Division) has requested the Power Division to release the pending amounts to help mitigate the situation, these measures alone will not suffice unless both Sui companies take immediate and decisive action.
The Petroleum Division has outlined the following urgent actions:
a) Immediate Borrowing of Funds: Both SNGPL and SSGC are advised to explore commercial borrowing options on a priority basis to address the outstanding payments to PSO, ensuring the latter’s financial stability.
b) Resolve the Gas Cost Equalization Issue: The long-pending matter of gas cost equalization must be resolved immediately, as it has been unresolved for an extended period.
c) Ensure Timely Payments to PSO: Immediate measures must be taken to settle PSO’s dues to avoid default on international payments.
The Petroleum Division reiterated the importance of swift action, stressing that the Sui companies must act promptly and wisely to prevent a potential default by PSO and avoid disruptions in the energy supply chain.
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