Pakistan State Oil (PSO) has attributed its escalating financial expenses—estimated at Rs12 billion—to the deepening circular debt crisis and stringent monetary policies implemented by the State Bank of Pakistan (SBP).
In a statement, the country’s largest fuel supplier said its mounting receivables are tied to entities affected by circular debt, particularly pending dues from Pakistan International Airlines (PIA) and other energy sector companies.
“These dues are under review at the highest levels of government,” the company said, adding that the issue is being closely monitored.
PSO clarified that aside from circular debt-linked payments, its remaining commercial receivables are part of normal business operations. The company confirmed that most of these amounts have already been recovered following audits.
Out of Rs25 billion in dues from retailers, a significant portion was cleared during the billing cycle, while outstanding payments from the Pakistan Shipping Corporation were fully settled. Other receivables from smaller retailers were described as “minor business transactions.”
PSO emphasized that its financial costs surged due to SBP’s financing conditions tied to circular debt. The sharp rise in the Karachi Interbank Offered Rate (KIBOR) worsened the impact, increasing by 4.35%—from 17.82% to 22.17%—and placing additional pressure on the company’s balance sheet.
The circular debt crisis has long plagued Pakistan’s energy sector, with PSO repeatedly calling for urgent government action to address delayed payments from state-run entities.
