Gencos owe Rs409bn to PSO, PPL, SNGPL
MUSHTAQ GHUMMAN
ISLAMABAD: The Petroleum Division has reportedly approached Prime Minister Shehbaz Sharif over the non-payment of more than Rs409 billion owed to Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), and Sui Northern Gas Pipelines Limited (SNGPL) by public sector power generation companies (GENCOs), well-informed sources told Business Recorder.
“We have taken up the matter of non-payment by GENCOs with the Prime Minister during a recent meeting of the Cabinet Committee on Energy (CCoE),” sources in the Petroleum Division said on condition of anonymity.
The Petroleum and Power Divisions of the Ministry of Energy are said to have serious differences over issues related to fuel payments and LNG supply to the power sector. The matter of outstanding liabilities was also discussed at a meeting of the Economic Coordination Committee (ECC) of the Cabinet.
“As discussed in the ECC meeting held on December 9, 2025, GENCO-II and GENCO-III owe substantial unpaid liabilities to fuel suppliers. The outstanding amount stands at Rs409.26 billion. However, these liabilities are not being reflected in the circular debt settlement plan being managed by the Power Division,” Petroleum Minister Ali Pervaiz Malik stated in a letter to Power Minister Sardar Awais Ahmad Khan Leghari.
In his letter, the Petroleum Minister claimed that the Power Minister had assured the ECC of making a personal effort to settle the outstanding liabilities.
“As assured by yourself in the recent ECC meeting regarding personal efforts for settlement of these outstanding liabilities, I shall be obliged if the planned settlement of petroleum sector liabilities can be shared. It would also be appreciated if a consultation meeting between the respective Additional Secretaries of both divisions is arranged to finalise a roadmap for the prompt settlement of these amounts,” sources quoted the Petroleum Minister as saying.
It remains unclear whether the Additional Secretaries of the Petroleum and Power divisions have held a meeting on the issue.
According to sources, PPL’s outstanding receivables from GENCO-II stand at Rs146.15 billion, comprising Rs77.63 billion in principal and Rs68.52 billion in late payment surcharge (LPS). Mari Petroleum’s receivables total Rs34 billion in principal and Rs 49 billion in LPS, while SNGPL’s receivables include Rs8.9 billion in principal and Rs21.21 billion in LPS. PSO’s receivables from GENCO-III stand at Rs150 billion, including Rs68 billion in principal and Rs82 billion in LPS.
Sources further stated that total principal receivables against GENCO-II amount to Rs120.53 billion, with LPS of Rs138.73 billion, while principal receivables against GENCO-III stand at Rs68 billion with LPS of Rs 82 billion.
On August 5, 2025, the Petroleum Minister had also written to the Power Minister, reminding him that during the CCoE meeting held on July 29, 2025, he had raised the issue of outstanding receivables of PSO, PPL, and SNGPL from GENCO-II and GENCO-III, which were not included in any discussion on the settlement of power sector circular debt.
At a recent meeting, the ECC observed that although IMF targets had been met, future efforts should focus on efficiency. As a long-term solution, the committee recommended gradually moving towards a uniform tariff. The Finance Division also supported the uniform tariff as a key tool to improve efficiency.
One of the major challenges highlighted was the circular debt, which stood at Rs1.614 trillion at the end of FY2025. Despite multiple reform measures, the circular debt continued to rise, underscoring the need to address debt flow through efficiency improvements.
The Power Division recalled that circular debt amounted to Rs 57 billion in FY2023 and Rs 83 billion in FY2024, while the debt flow turned negative at Rs 780 billion in FY2025. The accumulation was attributed to factors such as poor bill recoveries, line losses exceeding regulatory targets, unpaid budgeted subsidies, pending government payments, and K-Electric’s transition costs.
