The government has imposed an additional 30 billion rupees on the public to raise Rs 100 billion for emergency oil and gas payments and to maintain the IMF staff-level agreement. A billion-rupee tax hike has been approved. Will it save PSO from bankruptcy?
According to Dawn, the Economic Coordination Committee (ECC) of the Cabinet under Federal Finance Minister Miftah Ismail made the decision.
The meeting was told that the IMF’s additional budget commitment for the primary budget surplus of Rs 153 billion cannot be met without more taxes.
To reduce price uncertainty, the ECC may adjust prices weekly or every 10 days instead of every 15 days.
The ECC ordered the Finance Division and the Federal Board of Revenue to come up with tax proposals to raise Rs 30 billion within a week.
The Economic Coordination Committee also approved a Rs 30 billion supplementary budget grant for Pakistan State Oil (PSO), which owes around Rs 270 billion by August 28.
The ECC cleared the previous government’s outstanding payments to protect the PSOs from global payments-related insolvency, according to a meeting statement. What’s next?
The committee ordered the Power Division to pay Rs 20 billion within 24 hours and Rs 12 billion 8 crore by August 4.
On July 28, PSO’s receivables reached Rs 608 billion, of which only Rs 340 billion were from Sui Northern Gas Pipelines Limited (SNGPL).
LNG supply caused a Rs 213 billion shortfall from July 1, 2021.
SNGPL’s receivables have increased from Rs 43 billion to Rs 113 billion as of January 1, 2022 due to delayed payments from the CPPA. It’s R.
CPPA must pay PSO Rs 182 billion for fuel supply, including Rs 16 billion from July 1, 2022.
Secretary Petroleum requested that the PSO raise SOS calls to avoid a global default due to late payments by related entities, resulting in PSO Kuwait. KPC couldn’t pay Rs 81 billion per delivery contract.
PSO was unable to pay the government Rs 16 billion as agreed, so these payments were deferred to prevent international violations.
Despite these difficulties, the PSO met global payments in July 2022, but not in August, disrupting the supply chain.
PSO must make a global payment of Rs 267 billion in the first 15 days of August 2022 and is expected to receive Rs 157 billion, leaving a Rs 100 billion gap.