The Pakistan Credit Rating Agency (Pacra) has maintained the long-term and short-term entity ratings of Pakistan State Oil Company Limited (PSO) at "AA+" (double A plus) and "A1+" (A one plus) respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings reflect the strong ownership structure of the company - majority owned and controlled by Government of Pakistan - and high propensity of state support in distressed situations, considering the strategic nature of the company. The ratings also consider the leading market position of company in the OMC sector, supported by its extensive storage, distribution infrastructure, and robust IT system. Meanwhile, the cash flows of the company are currently stressed, as it is a part of the circular debt chain and PSO remains exposed to the international oil price volatility, which may transpire into inventory losses.-PR

Copyright Business Recorder, 2010