Rs1.98tr needed by Sept for fuel imports to minimise loadshedding.

ISLAMABAD -- With receivables of the state-run Pakistan State Oil (PSO) already at a backbreaking Rs600 billion record and counting, the Petroleum Division has reported a gross liquidity requirement of about Rs1.98 trillion for the first quarter of the next fiscal year beginning July 1 for fuel imports to minimise the prevailing loadshedding.

The PSO and Pakistan LNG Limited (PLL) are importing liquefied natural gas (LNG) to minimise the shortfall in the demand and supply of gas. Re-gasified LNG is supplied by the Karachi-based Sui Southern Gas Company (SSGC) and Lahore-based Sui Northern Gas Pipelines Limited (SNGPL) to consumers, including the power sector, in summer months.

During June to September this year, maximum LNG of 12-cargos each month is planned to be imported for supply to the power sector to minimise electricity loadshedding. PSO's plate is full with six cargos each month through a long-term contract with Qatar. PLL, on the other hand, has three term cargos each for July and September and one in August, while spot cargos are planned at three each in June, July and September and five cargos in August.

Spot cargos are still subject to be confirmed through tenders and timely opening of letters of credit (LCs) and payments to LNG suppliers. SNGPL has planned to supply 720 to 780 million cubic feet per day (mmcfd) to the power sector, whereas PLL will be ramping up its direct supplies to K-Electric from 62mmcfd in July to 130mmcfd in October to run its new power plant at full capacity.

PSO receivables touch 'backbreaking' Rs600bn

Due to the Russia-Ukraine situation and international demand-supply dynamics, the price of one spot LNG cargo is hovering around Rs15-16bn, enhancing the liquidity requirement of LNG importers. Besides LNG import, PSO is also importing furnace oil to meet the power sector's demand, which is adding to its financial constraints.

PSO and PLL have placed their estimated liquidity requirement during summer months under which PSO would need a total of Rs1.7tr at a rate of Rs427bn in June, Rs445bn in July, Rs413bn in August and Rs414bn in September for both LNG and furnace oil.

PLL, on the other hand, has sought a total of Rs278bn for four months, including Rs98bn during the current month, Rs44bn in July, Rs80bn in August and Rs56bn in September.

In-depth discussions with all stakeholders suggest that based on projected receipts of PSO and PLL from SNGPL, SSGCL, power sector and credit lines available with the...