PSO receivables cross PKR 900 billion as circular debt grows

Pakistan State Oil's (PSO) outstanding receivables have climbed above PKR 900 billion, underscoring the worsening circular debt crisis and intensifying liquidity pressures on the country's largest oil marketing company, according to the company's receivables and payables position as of June 30, 2026.

The document shows PSO's major receivables totaled PKR 915.67 billion, compared with major payables of PKR 105.66 billion, leaving the state-owned company heavily exposed to delayed payments from the power sector and government entities.

The largest share of receivables is owed by Sui Northern Gas Pipelines Ltd. (SNGPL), which owes PSO PKR 542.31 billion for re-gasified liquefied natural gas (RLNG) supplies delivered between 2017 and 2025. The amount includes the principal balance, late payment surcharge (LPS) and accrued LPS.

Receivables from the power sector stood at PKR 167.75 billion, primarily from government-owned power generation companies (GENCOs) and the Central Power Purchasing Agency (CPPA) for furnace oil supplies. The total also includes outstanding dues from Kot Addu Power Company (KAPCO).

PSO is also owed PKR 127.13 billion by Pakistan International Airlines (PIA) and the federal government. The amount includes PKR 30.73 billion in unpaid jet fuel bills from PIA, PKR 60.99 billion related to the exchange rate differential on the FE-25 loan, legacy petroleum differential claims, and new claims arising from petroleum price differential and import differential costs incurred in 2026.

In addition, the company is awaiting PKR 73.10 billion in sales tax refunds from the Federal Board of Revenue (FBR), while Pakistan Railways owes PKR 5.39 billion for supplies of high-speed diesel and lubricants.

On the liabilities side, PSO's major payables totaled PKR 105.66 billion, including PKR 70.42 billion owed to domestic refineries and PKR 35.24 billion in LNG-related obligations, including letters of credit, Karachi Port charges and standby letters of credit.

The figures illustrate the persistent buildup of circular debt across Pakistan's energy sector, with delayed payments by gas utilities, power producers and government entities continuing to squeeze PSO's cash flow and working capital despite its comparatively lower obligations to suppliers.