PSO complains about delay in arrival of vessels

Asks shipping ministry to resolve the matter with PNSC.

ISLAMABAD:

Pakistan State Oil (PSO) has complained about slow provision of vessels by the Pakistan National Shipping Corporation (PNSC) for the import of petroleum products as well as their poor quality and has sought intervention of the Ministry of Ports and Shipping, saying oil supplies could dry up if the issues are not addressed.

In a letter sent to the ministry on April 8, PSO – the largest oil marketing firm in the country – said PNSC was continuously providing vessels with a delay, which consequently delayed the arrival of ships at both the port of loading and discharge.

This was resulting in congestion at Keamari (Karachi Port) and Fotco (Fauji Oil Terminal) and also carried the risk of oil supplies being dried up, it said. PSO is also bearing additional costs in the form of demurrage and other charges.



Moreover, it is constantly faces risk of quality variation during transit of all free-on-board (fob) cargoes, which is a cause of major concern.

According to the PSO management, the company is suffering consequences of the dispute between PNSC and the Hydrocarbon Development Institute of Pakistan (HDIP), but has no control over such rows.

For instance, it pointed out that there was one vessel for light sulphur fuel oil (LSFO), which was brought by PSO on fob basis on April 2, with ‘on-specification’ LSFO at the port of loading, but on arrival the cargo was declared ‘off-specification’ by the HDIP.

As the dispute dragged on, the consignment could not be offloaded, making it impossible to supply furnace oil and causing losses to PSO, said the letter.

“The issues of waiting at the outer anchorage and slow pumping primarily occur due to delayed arrival of PNSC vessels at the port of discharge,” it added.

“PNSC must ensure timely delivery of cargoes that will avoid such delays. It is an issue which requires resolution between PNSC and the KPT (Karachi Port Trust). PSO and country only suffer the consequences of such delays.”

PSO pointed out that the multimillion-rupee demurrage cost it faced would be passed on to consumers. An amount of Rs433 million in demurrage claims in relation to 115 cargoes has been agreed between PSO and PNSC.

Regarding remaining demurrage claims of PNSC, PSO has highlighted discrepancies, prompting the former to suggest a joint review of all such claims.

“Furthermore, due to delayed provisioning of vessels at the port of loading, claims amounting to $2.5 million have been lodged by the suppliers. Details have been communicated to PNSC for settlement, however, its response is still awaited,” revealed the letter, adding payments, if any, would be made once all discrepancies were addressed.

PSO told the shipping ministry that its monthly schedule was based on the import plan finalised by the Oil Companies Advisory Committee (OCAC) and depended on various factors like berth availability, timely provision of vessels and fluctuating demand and supply in the country.

A series of meetings had been held with PNSC since February on the revision in freight rates and it was agreed that freight would be revised keeping in view the Average Freight Rate Assessment (AFRA) formula.

Despite repeated attempts, PNSC spokesman failed to respond till the filing of this report.

Published in The Express Tribune, April 10^th,  2015.

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