Railways may buy furnace oil from open market
Oil purchase committees being set up despite increase in credit limit from PSO.
LAHORE:
It seems that the fuel crisis for the cash-strapped Pakistan Railways is over after an increase in its credit limit by Pakistan State Oil. However, the crisis-ridden corporation is considering buying furnace oil from the open market as a precautionary measure and oil price committees are being formed in this regard.
This decision was taken in view of the recent fiasco when Pakistan State Oil suspended furnace oil supplies because of Railways’ inability to make timely payments. Railways then had to buy oil from the market, which was a first in its history.
The Fuel Purchase Committee will comprise an Additional Mechanical Engineer, Assistant Transport Officer, Accounts Officer and a Police representative of DSP level. These committees will be established separately in all divisions which will make it easier for the divisions to purchase oil from open market in case of any future crises.
Pakistan Railways faced severe oil crises along with shortage of locomotives last year. The finance ministry directed PSO to increase the oil purchase credit limit for railways to from Rs1 billion to Rs2 billion but the oil marketing company was reluctant to do so because of the bad payment history of Railways.
PSO stopped furnace oil supply to Railways in November-December last year after the outstanding dues for oil crossed Rs1.2 billion. Railways administration then decided to purchase oil from the open market and is now forming proper committees for this purpose.
The main reason for constituting these committees is to avoid any problem during audit as the audit committee may probe the matter in future, said Abdul Hamid Razi, Director Public Relations of Pakistan Railways while talking to The Express Tribune.
Razi also said that the committee will consist of on duty officers and will not be a burden on Railways. He said that Railways has so far not used the Rs1 billion line of credit. “Railways has so far paid Rs600 million to PSO as oil payments this month and now total outstanding dues stand around Rs900 million,” he said.
Razi said that Railways now has sufficient reserves of furnace oil for about seven days in all divisions and fresh consignments are constantly being delivered by PSO.
Published in The Express Tribune, January 26th, 2012.
It seems that the fuel crisis for the cash-strapped Pakistan Railways is over after an increase in its credit limit by Pakistan State Oil. However, the crisis-ridden corporation is considering buying furnace oil from the open market as a precautionary measure and oil price committees are being formed in this regard.
This decision was taken in view of the recent fiasco when Pakistan State Oil suspended furnace oil supplies because of Railways’ inability to make timely payments. Railways then had to buy oil from the market, which was a first in its history.
The Fuel Purchase Committee will comprise an Additional Mechanical Engineer, Assistant Transport Officer, Accounts Officer and a Police representative of DSP level. These committees will be established separately in all divisions which will make it easier for the divisions to purchase oil from open market in case of any future crises.
Pakistan Railways faced severe oil crises along with shortage of locomotives last year. The finance ministry directed PSO to increase the oil purchase credit limit for railways to from Rs1 billion to Rs2 billion but the oil marketing company was reluctant to do so because of the bad payment history of Railways.
PSO stopped furnace oil supply to Railways in November-December last year after the outstanding dues for oil crossed Rs1.2 billion. Railways administration then decided to purchase oil from the open market and is now forming proper committees for this purpose.
The main reason for constituting these committees is to avoid any problem during audit as the audit committee may probe the matter in future, said Abdul Hamid Razi, Director Public Relations of Pakistan Railways while talking to The Express Tribune.
Razi also said that the committee will consist of on duty officers and will not be a burden on Railways. He said that Railways has so far not used the Rs1 billion line of credit. “Railways has so far paid Rs600 million to PSO as oil payments this month and now total outstanding dues stand around Rs900 million,” he said.
Razi said that Railways now has sufficient reserves of furnace oil for about seven days in all divisions and fresh consignments are constantly being delivered by PSO.
Published in The Express Tribune, January 26th, 2012.