Pakistan State Oil (PSO) has asked the government to consider zero-rating jet fuel and petroleum products after delays in sales tax refunds left the company facing liquidity pressure and higher financing costs, The Express Tribune reported.
In a letter to the Petroleum Division, PSO said outstanding sales tax refunds had reached Rs54 billion for FY25, with repeated follow-ups to the Federal Board of Revenue failing to secure releases.
As of March 2025, PSO’s total receivables stood at Rs732 billion, including Rs325 billion owed by Sui Northern Gas Pipelines Limited. Late payment surcharges are estimated at around Rs200 billion.
The company noted that no new circular debt had accumulated since February 2024 following an understanding on monthly payment flows.
However, the company said blocked refunds had constrained cash flow and affected its ability to smoothly manage fuel supply operations nationwide.
PSO said the accumulation of receivables had increased reliance on short-term borrowing, raising financing costs. It requested immediate settlement of pending refunds and policy support to prevent future buildup, including shifting petroleum products to a zero-rated tax regime.
The company also flagged pressures linked to liquefied natural gas imports under a government-to-government agreement with Qatar, noting that power sector reluctance to lift committed cargoes had forced it to arrange diversion of 24 LNG shipments in 2026.
PSO said recent increases in petroleum margins and expansion of its retail network, 67 new outlets added, would support financial stability, with further expansion planned.
Discover more from Brackly News
Subscribe to get the latest posts sent to your email.
