Pakistan State Oil (PSO) on the verge of bankruptcy

Pakistan State Oil (PSO) on the verge of bankruptcy

ISLAMABAD: Former Islamabad Chamber of Commerce and Industry (ICCI) president Atif Ikram sheikh said on Sunday that the government should immediately settle the issue of circular debt, otherwise it will leave Pakistan State Oil bankrupt, disrupting import of oil and gas which will damage the economy and reverse all the economic gains.

In a statement issued today, the former ICCI president said that disruption in the energy supply chain would have a very negative impact on masses, industry and agriculture, therefore the issue should be resolved on priority.

Sheikh further said that the government was reluctant to clear the debt because it would widen the fiscal deficit which was against the national interests.

He added that government had settled circular debt worth Rs 480 billion in 2013 and claimed that it will never resurface again which proved otherwise.

He noted that circular debt had resurfaced with the government claiming it to be at Rs 393 billion while private power producers say that it was Rs 414 billion.

Sheikh further said that power producers were not paid, therefore, they are unable to pay Rs 274 billion to PSO on account of oil purchase. Consequently, PSO is unable to pay Rs 63 billion to oil and LNG suppliers of Kuwait and Qatar who can stop supplies at any time.

He said that the situation is grim but the Finance Ministry is not ready to pay more than Rs 6 billion which is ‘nothing but a joke’.