PSO Cash Crunch Raises Fresh Fuel Supply Concerns

Pakistan State Oil (PSO) is increasingly depending on short-term bank financing as rising unpaid receivables from the gas and power sectors continue to weaken its cash flow, raising renewed concerns about the stability of Pakistan's fuel supply chain, according to industry data.

Sui Northern Gas Pipelines Limited (SNGPL) remains PSO's largest debtor, with outstanding liabilities reaching Rs536 billion as of July 23, 2026. The total includes Rs274 billion in principal outstanding and Rs253 billion in late payment surcharge (LPS).

Industry sources said payments from SNGPL continue to fall behind the pace of imported LNG deliveries, leaving PSO with an ongoing liquidity shortfall.

Meanwhile, receivables from the power sector have risen to Rs168 billion, with a substantial portion remaining unpaid since FY2018-19, adding further strain to the company's financial position.

The accumulation of unpaid dues has created a wider financial bottleneck across Pakistan's energy supply chain, affecting domestic refineries as well as international fuel suppliers.

As a result, PSO has increasingly relied on bank borrowing, driving up debt servicing costs and putting growing pressure on its available credit facilities.

The worsening liquidity situation has also reduced the company's ability to settle payments to local refineries and overseas fuel suppliers on schedule.

Energy sector experts warn that unless the government implements a structured and immediate settlement plan, the prolonged liquidity crisis could disrupt fuel import schedules and create significant risks for the country's energy security.