PSO, Govt and IMF Work on Plan to Clear Circular Debt

Pakistan State Oil (PSO), the administration and the International Monetary Fund (IMF) are working on a plan to settle outstanding circular debt, with the company's management saying its receivables have remained unchanged since February 2024.

Key points

• PSO has recovered its market share to more than 40 percent, with most gains recorded since July 2026.
• Despite disruptions in the Strait of Hormuz, PSO received 11 QatarEnergy cargoes since March under existing contracts.
• As well as in other key cities, PSO intends to install EV charging facilities at selected outlets and along major routes, including Karachi-Hyderabad, Lahore and Rawalpindi-Peshawar.
• Local refineries are session around 95 to 97 percent of domestic high-speed diesel demand, PSO stated.
• Commercial and tariff negotiations for the White Oil Pipeline to Peshawar are nearing completion, with a few problems unresolved.

At the company's annual general session, management stated PSO had received around Rs. 10 billion from the Power Division after the financial year concluded and Rs. 26 billion from Sui Northern Gas Pipelines Limited (SNGPL) during the final quarter.

PSO has recovered its market share to more than 40 percent, with most gains recorded since July 2026. Management attributed the recovery to better product availability, pricing discipline and supply chain execution, saying it was profitable and not driven by aggressive discounts. SBP Doubles Minimum Capital Requirement for Banks.

To maintain its position among more than 40 oil marketing firms, PSO is refreshing its brand, investing in high-volume retail outlets and automating its supply chain.

Management expects industry fuel sales to remain broadly stable or grow modestly. Nevertheless, high petroleum costs, administration austerity measures and rising EV and solar adoption are weighing on demand. While the shift from furnace oil to gas may further affect petroleum consumption, gasoline demand expansion is anticipated to slow as EV employ increases.

Management remarked higher OMC margins depend on completing retail network automation, including automatic tank gauging systems. PSO expects to finish the upgrades by March 2027, potentially qualifying for revised margins. While OMC margins remain unchanged until the automation requirements are met, dealer margins have already rose.

Notably, the firm is additionally preparing for potential petroleum sector deregulation. It the administration is keen to pursue.

PSO remarked QatarEnergy LNG supplies under a government-to-government contract remain profitable on a standalone basis. Nevertheless, an effective tax rate above 50 percent, largely due to a one percent minimum tax on LNG turnover, makes the business loss-making after finance costs.

Despite disruptions in the Strait of Hormuz, PSO received 11 QatarEnergy cargoes since March under existing contracts. Winter supply planning is underway, with the administration coordinating procurement and contractual deliveries.

LPG Rates Stay Above Rs. 500 Per KG in Lahore Despite Fresh Supply.

PSO remarked it had no aims to exit LNG, provided structural problems were resolved with administration backing. While remaining amounts largely involve administration diversion payments owed to the utility, lNG-related accounts with SNGPL have been reconciled.

Local refineries are session around 95 to 97 percent of domestic high-speed diesel demand, PSO stated. Only four to five diesel cargoes have been imported since March 2026, making the cost differential between imported and locally produced diesel negligible during the period.

In practice, the firm additionally stressed the need to diversify crude oil and finished-product suppliers to reduce exposure to geopolitical disruptions. The Ministry of Petroleum is prioritizing a broader supplier base. PRL upgrades and White Oil Pipeline.

Pakistan Refinery Limited (PRL) remains a strategic asset for PSO, with backward integration seen as significant for profitability and supply security. The refining industry needs an estimated $5 billion to $6 billion for upgrades, but the funding structure remains undecided.

PSO is discussing upgrade and financing options with PRL, including feasible equity arrangements. Any change to PSO's stake will depend on the refinery's technical study, upgrade needs, Euro V compliance and the identity of a potential partner.

Commercial and tariff negotiations for the White Oil Pipeline to Peshawar are nearing completion, with a few problems unresolved. The project, involving PSO, SOCAR and FWO, intends to reduce road transport reliance and improve the safe, cost-effective movement of petroleum products. Construction is projected to commence once outstanding matters are settled. Stay Connected with ProPakistani.

Obtain the latest business news, market insights, and economic updates wherever you prefer. Follow on Google Discover. Follow on Google News Join WhatsApp. See more ProPakistani stories in Google Search and Top Stories.

In short, PSO, Govt and IMF Work on Plan to Clear Circular Debt is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.