‘Due to illegal sale of adulterated diesel, the national exchequer had faced around Rs20bn loss in four months’
ISLAMABAD: A large quantity of high-speed diesel (HSD), worth approximately Rs1.5 billion, which was being transported from Karachi to Muazaffargarh through the pipeline of Pak-Arab Pipeline Company Limited (PAPCO), has been seized at Mehmood Kot apparently due to its wrong and misleading specifications.
Well-informed sources told Pakistan Today that this high-speed diesel was imported from Karachi to Mehmood Kot by three oil marketing companies (OMCs) through PAPCO’s pipeline after necessary examinations and tests from the government laboratories.
They said upon checking, the flash point of the diesel (HSD) was found at 94 points and after a certain test from the government laboratory it was stored in the storage tanks of PAPCO in Karachi. Later, they added, PAPCO transported 12,000 tonnes of diesel through a pipeline from Karachi to Mehmood Kot (Muzaffargarh). However, flash point of that diesel was “found to be at 51 to 53 point during the retesting at Mehmood Kot”, they said.
Sources also informed that oil marketing companies, including Pakistan State Oil (PSO), Shell and Total Parco, after finding the “changed” specifications of HSD, had declined to purchase diesel from Mehmood Kot. They said the flash point of transported diesel was found below 66, which was already specified by the government as a standard, adding that the oil mafia was striving hard to find a middle way to declare this sub-standard diesel as a standard one.
It was also learnt from sources that PAPCO had formed a committee to investigate the matter and to hold the guilty party accountable. The committee was also tasked to improve the specification of this diesel and make it as the per government’s standard for its sale to OMCs.
Officials in the petroleum division on the condition of anonymity said that the sale of diesel has reduced to 0.15 million tonnes per month “owing to the ignorant behaviour of the ministry of energy, Oil and Gas Regulatory Authority (OGRA) and Pakistan Customs”.
They said due to the illegal sale of adulterated diesel in the country, the national exchequer had faced around Rs20 billion loss in only four months, adding that the flash point of diesel imported by PSO on 3rd September, 8th August and 26th July stood at 90, 94, and 90 respectively.
It is relevant to mention that imported diesel is usually transported through PAPCO’s white oil pipeline from Port Qasim to Mehmood Kot after laboratory tests/examinations and verification from HDIP and by PSO, as per set standard of the government. Sources in PSO revealed that examination of the flash point of the fuel at Mehmood Kot was the responsibility of the operator (PAPCO).
They said it was the responsibility of the pipeline operator to deeply examine and recheck the quality of fuel prior to pumping it into the pipeline system. They said that loss incurred due to the poor quality of fuel will be compensated by the operator of the pipeline, as per the fuel transportation agreement was inked between the oil marketing company and PEPCO.
It was also learnt that PSO’s standard for the flash point of imported petroleum products stands between 90-100 points while the government’s set standard of the flash point was at 66 points.
Sources in the oil sector disclosed that import of carbon continued unabated at the Karachi’s port and it was being sold to petrol pumps in drums. They said sub-standard high-speed diesel was being imported through these without any tax, duty, and petroleum levy.
They said although this revelation was made in a meeting of the Oil Companies Advisory Council (OCAC), yet OGRA and other concerned remained silent on this matter of serious nature. Irani diesel and mixing of kerosene oil in diesel have been causing a great loss to the legal sale of HSD in the country, they lamented.
It is worth mentioning that the Energy Ministry, FBR and OGRA had not taken concrete action against mixing of kerosene oil in diesel and sale of Irani diesel in the country despite complaints of sub-standard diesel to the customers.
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70 retired and tired top executives of Papco and Parco