Govt to lease fuel storage, delivery facilities to PSO

Move to tackle $200m worth of oil theft in power companies.

ISLAMABAD:

In a bid to stop large-scale furnace oil theft worth $200 million per annum, the government has decided to lease fuel storage and delivery facilities of power generation companies to Pakistan State Oil (PSO) by the end of August.

Estimates suggest that four power generation companies consume $2 billion worth of furnace oil in a year and a powerful lobby manages to steal a hefty quantity valuing about $200 million and instead mixes water with oil in the tankers.

According to sources, fake invoices about supply of furnace oil to storage tanks are made very often and oil is taken away before it reaches power stations. Power companies and the oil supplier place the blame on each other for the oil loss.

Now, in an attempt to crack down on the practice and minimise the fuel loss, the government could hand over fuel storage and delivery facilities of state-owned generation companies to state-run PSO by the end of next month.



In response to the government move, sources said, the PSO management had expressed serious reservations, stressing any such decision would be subject to certain conditions.

PSO wants to know when Jamshoro and Muzaffargarh thermal power plants are going to be converted into coal-based plants since there is no point in investing when these are being shifted to coal.

PSO says it will be in a position to take over oil tanks only if they are in operational condition. Most of the tanks in Muzaffargarh are in dilapidated condition and are not fit to be put to any use for other byproducts. They require massive investment in revamping.

According to sources, PSO stresses that the company has very limited manpower and resources, not enough to take over and revamp fuel facilities and tanks of power generation companies. The company will have to recruit and train the required manpower, which will take considerable amount of time.

PSO says it is not in a position to take over fuel storage facilities by August 31 and will accept these in a phased manner. In the first phase, only Jamshoro fuel storages will be taken on lease and later operational tanks of Muzaffargarh thermal power plant will be brought under PSO’s control.

“This will take one and a half years. Since a huge investment is needed with no returns, no additional lease/fee can be paid to Gencos by PSO or unless the same cost is allowed to be passed through the fuel oil price mechanism,” PSO adds.

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

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