The Pakistan State Oil (PSO) reported that its profit dropped by 90% in the financial year 2023, mainly because of an increase in the cost of production, inflation, and other financial vulnerabilities. The state-owned oil company’s profit stood at Rs 9.82 billion for the year that ended on June 30th.

In the previous financial year, PSO’s consolidated profit was Rs. 95.72 billion. The company stated that the increased circular debts are damaging its financial health to a great extent.

The report said, “A number of options are under discussion with the government to resolve the issue and reduce the unwarranted onus on PSO’s financials.”

According to the detailed financial analysis shared, for the first nine months (Jul-Mar) of the financial year 2023, “circular debt continued to be a major concern. Receivables from Sui Northern Gas Pipelines Limited (SNGPL) increased by 65% from March 31, 2022, increasing PSO’s average borrowings by 157% and finance cost by 995 basis points compared to the same period of last year.”

It further added, “FY23 continued to be fragile and turbulent on both the global and domestic fronts. World economies, including Pakistan, continue to battle high inflation and regressed growth with increasing financial vulnerabilities.”

The demand of petroleum products overall declined this year mainly due to the economic meltdown and increased fuel prices. The white oil sales was dropped by 19.6%, motor gasoline decreased by 17.1%, and diesel sales declined by 24.9%.

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