Pakistan State Oil (PSO) has reported a sharp rise in its financial expenses, reaching Rs12 billion. The company attributes this increase to the ongoing circular debt crisis and high interest rates set by the State Bank of Pakistan.
In a recent statement, PSO explained that many of its receivables are linked to entities affected by circular debt. These include unpaid dues from Pakistan International Airlines (PIA) and other companies in the energy sector.
According to PSO, these outstanding payments are currently being reviewed by top government officials. The company assured that the issue is under active monitoring.
Despite these challenges, PSO stated that most of its commercial dues—unrelated to circular debt—have been recovered. These fall under normal business activities and were cleared after audits.
Out of Rs25 billion owed by retailers, a major portion has already been settled within the billing cycle. Additionally, all dues from the Pakistan Shipping Corporation have been fully paid. Other pending payments from small retailers were described as minor and part of regular transactions.
PSO highlighted that the rising financial burden is also linked to high borrowing costs. The Karachi Interbank Offered Rate (KIBOR) rose by 4.35%, increasing from 17.82% to 22.17%. This rise in interest rates has added pressure to PSO’s financial position.
The company emphasized that tighter monetary policies have made it more expensive to manage its finances. With limited cash flow due to unpaid dues, PSO has had to rely on costly borrowing.
This financial strain comes at a time when the energy sector is already facing multiple economic challenges. PSO is working closely with authorities to resolve the circular debt issue and improve its financial health.
PSO remains committed to maintaining operations and ensuring fuel supply across the country, despite the current difficulties.
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