PSO hits out at cartels for creating hurdles

MD aims to make the company a global player in six years.

ISLAMABAD: Pakistan State Oil (PSO) Managing Director Naeem Yahya Mir has hit out at cartels, saying they are sucking blood and creating hurdles in the way of new projects to make PSO a global energy company.

“India is initiating 30 projects every day, but cartels are sucking our blood here to stop work on new initiatives,” Mir told the media at a press conference here on Tuesday.

He asked the old refineries operating in the country to restructure and modernise themselves to meet present-day requirements. “Byco refinery was set up by dismantling old plants and Parco is the only refinery that is efficient,” he said and pledged that PSO would be made a global energy player in the next six years.

He pointed out that India had won access to the markets of Japan and United States by setting up refineries and said, “I want to follow this vision and make PSO the number one marketing company in Pakistan in the next two years.”

PSO has planned to set up a refinery, in collaboration with the private sector, with a capacity of 40,000 barrels per day in the northern part of the country that will produce petrol of Euro-IV quality.

“I have broken cartels of some companies by allowing 2.7% oxygenate content in oil tenders and saved Rs3 billion per year,” he said, adding now cartels had turned against the company. Earlier, PSO tenders did not allow oxygenate content, which allowed some suppliers to create a monopoly.

Talking about circular debt, the MD said the country would have to take bold steps to minimise the impact of inter-corporate debt.



Though the energy sector is bleeding because of the circular debt, receivables of PSO have come down to Rs120 billion compared to Rs240 billion earlier. Mir stressed the need for focusing on oil and gas exploration, which would save billions of rupees as the country imported six million tons of fuel oil, 3.5 million tons of diesel, 1.5 million tons of petrol and 0.5 million tons of jet fuel every year.

He said PSO would establish blending plants within the timeframe of four years and until that time, the company has entered into an agreement with Bakri Trading, an oil supplier based in Saudi Arabia.

The Economic Coordination Committee (ECC) has also approved the setting up of blending plants in the country.

Mir said PSO stopped the addition of detergent additives to motor gasoline (mogas) and diesel, leading to savings of Rs635 million per year. In addition to this, the company is also expected to save Rs450 million per year by halting payment of war insurance premium on import of petroleum products.



Additionally, the company will save about $200 million annually by purchasing petroleum products from local sources and refineries. A further saving of Rs500 million is likely with the help of national flag carrier Pakistan National Shipping Corporation (PNSC), which will bring furnace oil from the international market.

Mir highlighted some of the initiatives taken by PSO including the signing of a Contract of Affreightment (COA) with PNSC for shipment of furnace oil from foreign ports and development of a new oil tanker mooring point and storage facility at Hub, which would increase national storage capacity and reduce congestion at jetties.

He also outlined plans to establish over 100 liquefied petroleum gas (LPG) auto stations next year and agreements with Parco, Byco and Bakri Trading for supply of petroleum products.

Published in The Express Tribune, November 28^th, 2012.