Recently, different ministries had filed a complaint to the Prime Minister (PM) Imran Khan that Pakistan State Oil (PSO) has discontinued transport of Petroleum, Oil, and Lubricants (POL) products through Pakistan Railways.
PSO has been utilizing the services of foreign shipping companies resulting in the use of precious foreign exchange reserves of Pakistan.
Petroleum Division secretary was directed by the cabinet to submit a report, explaining reasons as to why services of Pakistan Railways and Pakistan National Shipping Corporation (PNSC) were not used to transport POL imports by PSO.
PSO has been awarded the most expensive LNG cargo to commodity trader Vitol at 24.5456 per cent of Brent (about $17.86 per mmBtu). PSO booked Vitol on August 31.
PSO officials have explained that they have to face challenges while using Pakistan Railway due to its limited infrastructure. Furthermore, they stated that the reason PSO is not shifting to PNSC is that PNSC does not take in-transit quality responsibility for the product and there are multiple past issues of delays.
Moreover, PSO did not receive any bid for liquefied natural gas (LNG) supply due to supply constraints in the international market.
However, as PSO has received some exemptions from Public Procurement Regulatory Authority (PPRA) rules, due to Finance Minister Shaukat Tarin’s support, PSO is planning to urgently go for fresh bidding.
Additionally, PSO is also involved in the case of circular debt worth Rs180 billion that is due to be paid y power sector companies.