The Economic Coordination Committee (ECC) of the Cabinet on Friday approved Rs25 billion for the PSO against Rs50 billion sought to avert immediate disruption in LNG and oil supply in the country by addressing its liquidity constraints.
The ECC meeting presided over by Finance Minister Shaukat Tarin approved supplementary grant of Rs25 billion for the PSO on a summary moved by the Petroleum Division.
Sources said that the meeting was informed that the PSO entrusted to ensure sustained, secure and affordable supply of oil, gas, and LNG to various sectors of economy including power, fertilisers, export, non-export, and domestic has been facing financial constraints due to delay in payment from end users.
Out of almost 4,000 MMCFD gas injected in the economy, 2,800 MMCFD is domestic gas, whereas, the remaining volumes (nearly I,200 MMCFD) are imported as LNG and PSO assume massive commercial exposures despite, a legacy of deferred and delayed payments from end users.
The meeting was further informed that delayed payments from power sector, subsidised RLNG supplies to zero-rated sector and RLNG diversion to the domestic sector at substantially low prices are the major contributing factors in the accumulation of circular debt and making PSO financially vulnerable.
The story was originally published in Business Recorder on April 02, 2022.