A dispute has emerged between the Central Power Purchasing Agency–Guaranteed (CPPA-G) and Pakistan State Oil (PSO) over the status and authenticity of PSO’s outstanding receivables from the Nandipur Power Plant (NPP), with both sides presenting conflicting positions during recent discussions, according to officials familiar with the matter.

The issue came to light following a meeting in Islamabad on December 30, 2025, convened to review gas allocation matters and the Gas Sale Purchase Agreements (GSPAs) for the Guddu Power Plant (GPP) and Nandipur Power Plant. PSO representatives joined remotely and were instructed to formally submit the receivable position for GENCO-III/NPP as of January 1, 2025.

According to PSO, its principal receivables from GENCO-III stand at Rs65.3 billion, of which Rs61.1 billion relate to the Nandipur plant. When including late payment surcharge (LPS), PSO calculates GENCO-III’s total outstanding exposure at Rs159.2 billion, comprising Rs93.9 billion in surcharge.

PSO maintains that when it approached CPPA-G for payment, it was informed that CPPA-G held no outstanding liability toward GENCO-III or NPP, asserting that all relevant amounts had already been settled. PSO claims the GENCO-III management acknowledged in an October 2019 meeting in Muzaffargarh that CPPA-G had paid approximately Rs61 billion intended for PSO.

PSO further alleges that GENCO-III diverted Rs32 billion of that amount toward capital expenditure on the Nandipur plant and allocated the remaining Rs29 billion to cover early operational losses. Additionally, PSO states that its receivables include Rs3.8 billion stemming from furnace oil supplies to Nandipur in July 2016, consisting of Rs87 million in principal and Rs3.8 billion in surcharge.

Despite repeated follow-ups, PSO claims no settlement progress has been achieved and has requested intervention from the Minister for Power, noting that delays in clearing dues could complicate the planned privatisation of Nandipur.

In a related development, the Petroleum Division has escalated concerns to Prime Minister Shehbaz Sharif over more than Rs409 billion in unpaid dues owed to PSO, Pakistan Petroleum Limited (PPL) and Sui Northern Gas Pipelines Limited (SNGPL) by state-owned thermal power companies (GENCOs).

The matter was also discussed at an Economic Coordination Committee (ECC) meeting on December 9, 2025, where it was noted that GENCO-II and GENCO-III collectively owe Rs409.26 billion to fuel suppliers.

Following the ECC meeting, the Minister for Petroleum sought a defined repayment mechanism, reminding that the Minister for Power had assured personal efforts to address the issue and requesting a structured settlement plan and a coordination meeting between both divisions’ Additional Secretaries.

Latest figures indicate that PPL’s receivables from GENCO-II amount to Rs146.15 billion (principal Rs77.63 billion, LPS Rs68.52 billion). Mari Petroleum is owed Rs34 billion in principal and Rs49 billion in surcharge, while SNGPL’s receivables stand at Rs8.9 billion in principal and Rs21.21 billion in surcharge.

PSO’s receivables from GENCO-III total Rs150 billion, including Rs68 billion principal and Rs82 billion surcharge. In aggregate, GENCO-II owes Rs120.53 billion in principal with Rs138.73 billion in surcharge, while GENCO-III owes Rs68 billion in principal with Rs82 billion in surcharge.

The accumulation of these liabilities has been raised multiple times, including in correspondence dated August 5, 2025, where the Petroleum Minister reminded that the issue had been highlighted at a Cabinet Committee on Energy (CCoE) session on July 29, 2025, but was not addressed in discussions related to circular debt reduction.