Pakistan State Oil (PSO), the country’s leading oil marketer, reveals ongoing discussions with the government regarding a strategic plan to acquire stakes in public sector energy companies as a means to address its mounting debt, particularly from entities like the national airline.
Syed Muhammad Taha, the Managing Director and Chief Executive of PSO, disclosed the proposal, emphasizing that competitive bidding processes would be adhered to, ensuring transparency. Taha highlighted the potential offset of acquired stakes against PSO’s receivables as a viable solution under consideration.
While the government holds a 25% stake in PSO, private shareholders own the remainder. However, government officials, including the petroleum and information ministers, have yet to comment on the matter.
Circular debt within Pakistan’s power and gas sectors, amounting to Rs4.6 trillion ($17 billion) by June 2023, poses a significant challenge, representing approximately 5% of the GDP, as per the IMF.
Taha underscored the positive impact of IMF-led reforms in enhancing creditors’ payment capabilities within the sector, a trend expected to persist.
PSO’s aggregate receivables, totaling Rs499 billion ($1.8 billion), primarily comprise amounts owed by entities such as Sui Northern Gas, where the government holds a substantial stake.
The proposal extends beyond stake acquisitions to include discussions on potential ownership of assets like power plants in Nandipur and Guddu, as well as equity stakes in profitable public sector entities like Oil and Gas Development Co., signaling PSO’s proactive approach in addressing its financial challenges.
