Karachi: Pakistan State Oil is in talks with the federal government over a plan to acquire stakes in public sector energy companies in a bid to offset debt it is payable by these companies.
PSO’s Managing Director and Chief Executive Syed Muhammad Taha told the news agency that the process to acquire stakes in energy companies would be done through competitive bidding, and in case of successful bids, the stakes would be offset against PSO’s receivables.
The Managing director also said that, the proposal from PSO is under consideration and the company is working with the government on it.
Resolving the issue of rising debt across the country’s power sector is one of the major concerns of the International Monetary Fund (IMF), which will begin talks with Pakistan soon over a new long-term program.
Pakistan’s government, with a stake of about 25%, is the biggest shareholder of PSO, but private shareholders own the rest.
According to the IMF, the power and gas sectors’ circular debt stood at almost $17 billion by June 2023, accounting for 5 percent of the country’s GDP. The country has taken certain measures like increasing energy prices to resolve the pile up of the debt but the issue is far from resolved.
The PSO’s Managing director Taha said PSO was also a part of the broader settlement framework for the privatization of Pakistan International Airlines, which would potentially include a clean asset switch and a stake in the airline’s non-core assets.
