ISLAMABAD: The release of Rs 60 billion in finance for Pakistan State Oil (PSO) to be able to satisfy its financial commitments was authorised at a meeting of the Economic Coordination Committee (ECC) of the federal cabinet, among other decisions.

The bulk of this money will come from commercial banks because of the fact that Rs. 10 billion of it is a budgeted subsidy and Rs. 50 billion of it is a government of Pakistan guarantee against bank financing. Three Pakistani hospitals that are located in Afghanistan were also addressed during the ECC conference, along with the subject of sugar exports.

The meeting, presided by by Finance Minister Ishaq Dar, considered a summary of the PSO’s cash needs that was presented by the petroleum division. The oil company’s cash issues had been seriously alarmed by PSO’s financial statements from late last year. In its cash and cash equivalents, the firm reported a net loss of Rs. 11.4 billion for the three months that ended in September 2022, as opposed to a cash inflow of Rs. 41 billion during the same time previous year. This results in a decrease of roughly 127% overall.

The majority of Pakistan’s petroleum products, including liquified natural and crude oil as well as finished goods like motor gas (mogas) and high-speed diesel, are imported by PSO as the country’s national oil corporation (HSD). The petroleum division had expressed worries in its summary on PSO’s capacity to import LNG and petroleum products into the nation.

According to sources, the Petroleum division has requested that the ECC transfer Rs 18 billion to SNGPL in one go under the heading “subsidy to domestic customers via SNGPL (RLNG)” in order to settle SNGPL’s unresolved claims of LNG diversion totaling Rs 109 billion.

In a same vein, it has requested Rs 100 billion in additional funding under the heading “subsidy to domestic consumers via SNGPL (RLNG) for covering SNGPL accumulated and expected LNG diversion cost to domestic customers.”

According to sources, the top brass in the petroleum division requested that the ECC adopt the aforementioned suggestions so that PSO could continue to meet its payment commitments to LNG suppliers and prevent the risk of the LNG supply chain breaking down.

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