In the midst of the continued freefall of the Pakistani rupee against the US dollar, Pakistan State Oil (PSO) is experiencing a financial crisis. For the provision of liquefied natural gas, the business has filed claims totaling Rs6.7 billion against gas utility Sui Northern Gas Pipeline Ltd (SNGPL) (LNG).
PSO joined the LNG market in 2015 when the previous administration was in office, which put the firm in financial trouble as it tried to get paid multiple billion rupees for its deliveries.
Government enterprises are on the verge of bankruptcy as a result of the use of expensive LNG in domestic sectors throughout the winter to combat gas shortages and the distribution of LNG at subsidized prices to five export-oriented industries, including textiles.
Despite the significant development the textile industry has seen, the fertilisers industry has also been using gas that has been subsidized. But, because they have been hesitant to acquire cotton, the textile industry and ginning mills have worsened the farmers problems.
Farmers are still waiting for customers to purchase their previous harvest even though the cotton planting season has begun.
SNGPL cannot pay the bills for the LNG provided by PSO and has not been able to receive invoices for deliveries of LNG to residential sectors.
The total amount of receivables held by PSO has reached an all-time high of Rs742.3 billion, with SNGPL being the biggest defaulter, failing to pay Rs464 billion for LNG.
LNG is brought in by PSO from Qatar and given to SNGPL for distribution to clients. Moreover, PSO has lost Rs6.75 billion to SNGPL due to the rapid fluctuation in the exchange rate during LNG imports.
Consumer receivables are increasing and are a severe threat to the oil and gas supply.
?