The Ministry of Finance has declared the financial systems of Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), Sui Southern Gas Company (SSGC), and Sui Northern Gas Pipelines Limited (SNGPL) to be outdated and ineffective, Express News reported on Sunday.
The ministry has raised concerns over the financial management within the oil and gas sector. Sources within the ministry revealed that the infrastructure of these companies has become inefficient, creating significant challenges for all five entities.
Issues such as receivables in SNGPL and SSGC have weakened their financial stability, leading to a greater reliance on government support. Circular debt in the energy sector has worsened cash flow problems, while accumulating unpaid dues have further strained liquidity.
According to the ministry, the increasing liabilities have negatively impacted the economic stability of these companies, amplifying their dependence on government assistance. The outdated technology has also resulted in reduced production and higher operational costs.
The gas transmission and distribution systems are suffering considerable losses. By implementing effective business strategies, these revenue losses could be reduced, and operational efficiency could be enhanced. Strengthening the financial systems is considered a crucial step in addressing the issue of circular debt.
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