Pakistan State Oil (PSO) has attributed its rising financial expenses—estimated at Rs12 billion—to the worsening circular debt crisis and tighter monetary conditions imposed by the State Bank of Pakistan.
In an official announcement, PSO clarified that its high receivables are largely tied to entities impacted by circular debt, particularly pending dues from Pakistan International Airlines (PIA) and other energy sector players.
“These dues are under review at the highest levels of government,” the company noted, assuring that the matter is being closely monitored.
Most commercial dues already recovered
PSO added that apart from circular debt-linked payments, its outstanding commercial dues are part of normal business operations. Most of these amounts, the company said, have already been recovered after audit.
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Out of Rs25 billion in dues from retailers, a large portion has been cleared during the billing cycle.
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Dues related to Pakistan Shipping Corporation have been fully settled.
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Other receivables from small retailers were described as “minor business transactions.”
The company highlighted that financial costs rose sharply as a result of the State Bank’s financing conditions for circular debt. The Karachi Interbank Offered Rate (KIBOR) increased by 4.35%, climbing from 17.82% to 22.17%, further straining PSO’s balance sheet.
