Pakistan State Oil (PSO) is grappling with a financial crisis as the Pakistani rupee plummets against the US dollar. As a result, PSO has filed claims of Rs6.7 billion against Sui Northern Gas Pipeline Limited (SNGPL) for Liquefied Natural Gas (LNG) supply.
Entering the LNG business in 2015 during the previous government’s tenure, PSO has since faced financial challenges due to unpaid bills for its supplies.
The use of costly LNG in domestic sectors during winter to address gas shortages and the provision of subsidized LNG to five export-oriented sectors, including textiles, has pushed government companies toward financial ruin.
The fertilizer sector has also used subsidized gas, further compounding the issue. SNGPL has failed to collect bills for LNG supplies to domestic sectors and, as a result, cannot pay PSO’s bills for supplied LNG. As a result, PSO’s receivables have skyrocketed to a record Rs742.3 billion, with SNGPL as the largest defaulter, owing Rs464 billion for LNG received.
PSO imports LNG from Qatar and supplies it to SNGPL for customer distribution. However, the rapid fluctuation in exchange rates during LNG imports has resulted in a loss of Rs6.75 billion for PSO against SNGPL.
As customer receivables grow, the oil and gas supply is at risk. PSO also supplies oil to various clients nationwide and provides LNG for a public gas utility. However, circular debt has arisen in the supply of imported LNG, contributing Rs464 billion to the debt.
 is grappling with a financial crisis as the Pakistani rupee plummets against the US dollar, and unpaid bills for its LNG supplies pile up. Learn about the impact on the oil and gas supply in Pakistan.){kind=link}