Predicament: Another petrol shortage feared as vessels arrive late

PNSC wants revision in freight rates to address the issue

ISLAMABAD:

The possibility of petrol shortage is emerging again due to continuous delay in the provision of vessels for the import of petroleum products by the Pakistan National Shipping Corporation (PNSC).

According to a petroleum ministry official, the petrol scarcity in January this year was due to late arrival of PNSC vessels for the loading and transport of imported cargo.

Ministry officials say since January 2014, PNSC has delayed the provision of 77 vessels to Pakistan State Oil (PSO) for the import of petroleum products. This is the breach of timelines outlined in the Contract of Affreightment between PNSC and PSO and has caused losses to the national exchequer.

Now, officials say, PNSC vessels are again arriving late. Vessels were not provided for loading a petrol cargo scheduled for May 5-7 and another petrol cargo scheduled for May 7-9.

It also did not provide any vessel for bringing high sulphur fuel oil on May 20-22, which could lead to electricity breakdown in the country.

According to the officials, the demand for furnace oil increases in summer because of a rise in consumption of electricity and sowing of major crops.

Petroleum dealers also say they are facing problems in supply of petrol as oil marketing companies are not meeting their demand. They fear that consumers will face severe shortages if the situation remains the same.

PNSC’s view

A spokesman for PNSC told The Express Tribune that the real issue behind the problem was freight rates that needed to be revised.

He said they had an agreement for bringing petrol at $9 per ton but its market rate was $15, adding PNSC arranged a ship at $14 but PSO did not nominate the supplier.

He said PSO claimed that it had arranged a ship at $11 per ton and if it was true PNSC was ready to bear the cost difference.

He added they were bringing furnace oil at $7.75 per ton against the market price of $11, but PNSC wanted a revision in the rates in line with prevailing market conditions to address the issue.

Published in The Express Tribune, May 31^st, 2015.

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