PSO’s Receiveables From PIA Near Rs. 28 Billion

The receivables of Pakistan State Oil from national flag carrier Pakistan International Airlines (PIA) have neared Rs. 28 billion. The petroleum corporation has suggested charging a Rs. 4 per liter levy on Jet-A1 fuel to fast-track recovery from PIA. PIA owes Rs. 15.8 billion to PSO including principal and late surcharges totaling roughy Rs. 28 billion as of January 31, 2024. PSO previously expressed concerns about transferring PIA liabilities to a holding company as part of the airline’s revival plan last year. PSO rejected the proposal, citing difficulties as a publicly listed company and potential harm to its interests. It suggested exploring alternative settlement options, including cash payments, Pakistan Investment Bonds (PIBs), equity shares in the new company, asset transfers, or imposing a levy on Jet-A1. The PSO Board of Management supported the company’s decision to reject the proposal of transferring PSO’s receivables to the holding company and to explore various settlement options to recover pending dues from PIA. Earlier this week, it was revealed that PSO will ask the federal government for a Rs. 70 billion bailout so it may avoid default. PSO’s liquidity position has reached a critical juncture, with receivables soaring to Rs. 852 billion. Sui Northern Gas Pipelines Limited owes Rs. 571 billion. With total borrowing projected to reach Rs. 511 billion, PSO faces imminent default on international payments, prompting drastic measures such as delaying deposits to the government and deferred payments to suppliers.