Railways faces fuel crisis, wants credit limit doubled

Oil suppliers have not implemented govt’s decision of doubling diesel credit limit.

LAHORE: The national carrier – Pakistan Railways (PR) – has been facing a chronic fuel crisis owing to multiple reasons, of which the unimplemented decision on revision of credit limit by oil suppliers is the biggest, The Express Tribune had learnt.

Previously on the request of the Railways, the government doubled the oil credit limit to Rs2 billion from Rs1 billion to address the fuel crisis, but the oil suppliers have not implemented the decision to revise the credit limit to facilitate the national carrier, an official requesting anonymity said.

PR’s spokesperson said that the government had fixed the outstanding dues limit at Rs1 billion. For the last many months, Railways outstanding dues against diesel were below the billion limit, even before the revision of the credit limit to Rs2 billion recently. There was no shortage of diesel and the hue and cry was not based on facts, he added.

The PR can curtail the fuel crisis if it preferred to procure its majority of diesel requirements from the open market, but it was not being done by the divisional superintendents owing to the lack of will and heavy procedure involved, the official said. It will take five to six days to transport the fuel bought from Karachi to destinations across Pakistan, whereas it will be less time consuming to buy diesel from the local market.



To continue operating, the Railways was purchasing diesel from Pakistan State Oil (PSO) on a daily-basis to fulfil the requirement of all its divisions. The National carrier’s daily consumption is calculated at 263,000 litres. The highest requirement of diesel was calculated 80,000 litres in Lahore division, 75,000 litres in Karachi and 3,000 litres – lowest demand – for Kotri division.

The diesel was procured from PSO’s depot at Karachi and it took five to six days to transport it to PR’s Lahore and Peshawar divisions. And as most passenger services begin their journey from Lahore, the long fuel supply chain is obstructing smooth operations from the region. “If a major portion of diesel requirement is purchased locally, this issue can be resolved,” the official said.

PR’s management has allowed division managers to acquire diesel locally, from the open market, but due to lengthy procedures the managers have not shown any interest.

To address this issue, the higher authorities also allowed divisional superintendents to purchase diesel from the open market to meet the demand in case of shortage in oil supply.

According to the instructions, it is mandatory for the division superintendents to ensure diesel supply of three to four days as reserves.

Published in The Express Tribune, March 6^th, 2013.

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