The Petroleum ministry has asked Prime Minister Nawaz Sharif to take immediate action on the outstanding bills to oil and gas firms in order to avoid default. The power generating firms’ payables to oil and gas firms stand at a whopping amount of Rs 338 Billion. The ministry urged the Premier to take prompt steps to clear these dues or risk a major default of oil and gas companies which in turn would halt the entire system.
PSO is the only state-owned oil marketing company and it is also the largest oil supplier to power producers. PSO’s receivables stand at an amount of Rs 228.20 billion which is the highest amount amongst all of the oil and gas suppliers to power generation companies, according to officials of the concerned ministry. PSO says it is supplying fuel to this entire power producer sector on the direction of government which does not want any hiccups in power generation to avoid electricity outages.
Sui Southern Gas Company (SSGC), Sui Northern Gas Pipeline (SNGPL), Oil and Gas Development (OGDC) and Pakistan Petroleum Limited (PPL) are providing gas to power producers but their receivables have reached at an alarming level.
These outstanding amounts have deteriorated the liquidity position of these companies making payment to local and foreign difficult, resulting in a disruption of entire supply chain. In order to avoid the worst possible situation, Government needs to step in and clear the dues to avoid default by these suppliers to avert a power crisis in the coming months.
In total, power producers owe Rs 55.6 billion to OGDC, Rs28.18 billion to SNGPL, Rs19.27 billion to PPL and Rs 8.76 to SSGC. Pepco, Genco, Hub Power Co, Kapco and Government Private Holdings are the major defaulters to these oil and gas companies.