Pakistan State Oil (PSO) has around US$408 million of letter of credit (L/Cs) obligations due to its suppliers.

But the launch of a US$1.43 billion Islamic bond to rescue the troubled energy sector has been delayed, casting doubt on the ability of PSO to meet its obligations.

L/Cs due

PSO has around US$300 million of L/C obligations due to foreign suppliers.

Pakistan's largest state-owned firm also has $108 million of L/C obligations due to refiners.

Financing delay

The delay in the launch of the bond issue leaves PSO in dire straits with its receivables going beyond a record US$2.6 billion.

The country's largest fuel supplier has been pressing the petroleum and finance division for the release of at least US$71 million to ensure smooth supplies of liquefied natural gas and other petroleum products.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.