The public-sector juggernaut Pakistan State Oil (PSO) is teetering on the brink of default once more, endangering the nation’s LNG supplies at a time when winter is already here, just a quarter after the government paid Rs30 billion to enable PSO stay solvent.Receivables past due with other public agencies, or the so-called “circular debt crisis,” which has plagued Pakistan’s energy sector for years with no end in sight, are the cause of the fossil fuel juggernaut’s liquidity issues.
For instance, the government-owned SNGPL alone owes PSO more than Rs400 billion for LNG purchases, or around 160% of the approximately Rs220 billion required by the latter to continue being solvent with regard to import payments. Let’s not forget that at a fraction of the price, the same LNG was reliquefied and put into the piped natural gas infrastructure. Everyone will say, “This is no time for recriminations,” even though it is the appropriate time to do so.
Since we will forget the issue once we are past this snarl up and then suddenly remember it again once we hit a logjam, there won’t actually be another time for recriminations. Without prompt and reliable accountability, there will never be improvement.
Let’s start working on our tasks then. We attribute it to poor leadership and strategic blindness, both of which are signs of a shaky hand on the helm. For instance, PSO is unable to pay its import costs because SNGPL refuses to pay its debts to PSO, which is due to someone else’s decision to sell pricey RLNG at discount rates. Without a doubt, our political leadership was responsible for forcing SNGPL to incur this unnecessary expense in the first place. Therefore, our political leadership is to blame for creating circular debt, as well as accountable for finding a solution. Following the money can be an alternative strategy.
Follow the entire gravy train by concentrating on the petroleum industry. Who profited unexpectedly as the public complained about exorbitant energy prices? They are the ones who starve the economy while milking it. Analyzing the size, composition, and scope of PSOs would be still another strategy. The enormous business towers over the industry, encompassing all business operations from sourcing to marketing to distribution, or, to put it another way, everything from the wellhead to the pump.
It allegedly possesses LPG storage and bottling facilities, lubricant production facilities, depots, refuelling stations at airports, retail shops, installations, and these other things.
Its area of influence includes a wide variety of fossil fuels and their derivatives. What possible benefit could there possibly be from putting all those eggs in one basket? is the question to ask analysis. In reality, the PSO example may serve as Exhibit A for the elimination of all megalithic organisations, particularly when they are making money at the cost of the entire population when it is gathered into one large captive market.
The energy industry is an oligopoly of numerous contiguous oligopolies whose domination has blinded us to the country’s limitless and free alternative energy resources, and what is true of PSO is also true of the energy sector. We spend the summer months whining about how much sun we are getting yet cannot use any of that solar energy to cool our homes and workplaces. We complain about how frigid the winds are all winter long but are unable to use any of that energy to heat our homes or businesses.