From Zeeshan Mirza
KARACHI: Pakistan State Oil Company Limited (PSO) on Thursday announced its financial result for the first half of the current financial year posting a profit after tax (PAT) of Rs. 7.75 billion.
As per the PSO’s financial report, the company posts a net profit of Rs. 7.75 billion during July-December 2023 compared to a loss of Rs. 3.36 billion in the same period last year. According to Arif Habib Limited, the PSO’s earnings stood at Rs 16.51 per share meanwhile the total sales stood at Rs 1.9 trillion during the 1HFY24. Amidst soaring inflation, stagnant growth, and geopolitical tension, the petroleum sector witnessed a downturn in product demand.
PSO adeptly maneuvered through the obstacles and ensured uninterrupted nationwide fuel supply, stated PSO in a press release. PSO bolstered its market share in white oil with a notable 1.9 percent increase while the market share of PSO in overall diesel sales reached at 55.3 percent.
Earlier last month, Pakistan State Oil (PSO) faces an ongoing challenge as its receivables surpass the unprecedented Rs800 billion mark, attributed to delayed payments from clients.
The company’s debt has escalated notably since its foray into the liquefied natural gas (LNG) market. The surge in receivables began with PSO’s involvement in the LNG market, particularly with a public gas utility, which owes Rs519 billion for imported LNG supplies. Despite a recent significant increase of up to 139% in gas prices by the caretaker government, aimed at addressing circular debt, the debt continues to rise, especially due to heightened demand for LNG during the winter season.
Under a government-to-government (G2G) arrangement with Qatar Petroleum, PSO entered into an agreement for LNG imports, adding to the financial burden. Currently, PSO is grappling with the task of recovering Rs802 billion from its clients, a substantial increase from Rs362 billion in August 2021.
Among the major defaulters are power generation companies, with total outstanding payments of Rs150.8 billion. Hubco owes Rs29.5 billion, while Kapco has liabilities amounting to Rs5 billion. Pakistan International Airlines (PIA) is another significant defaulter, accumulating Rs27.9 billion in unpaid dues for jet fuel supplied by PSO.
In addition to outstanding client payments, PSO is awaiting the recovery of Rs8.9 billion from the government, attributed to price differential claims. The accumulating receivables are now impacting the company’s ability to settle its dues with oil refineries, resulting in payables rising to alarming levels.
