Oil transportation: PNSC fears losing business to PSO

Asks govt to withdraw petroleum ministry’s summary from ECC

Zafar Bhutta April 25, 2015
In 2013 and 2014, PNSC had also made efforts to buy oil tankers, but the process was marred with allegations of kickbacks and corruption and was then put on hold. PHOTO: RIAZ AHMED/EXPRESS


The Pakistan National Shipping Corporation (PNSC) is pressing the government to withdraw a summary sent to the Economic Coordination Committee (ECC) that holds the national shipping line responsible for petrol shortage, fearing it could lose the oil transportation business to Pakistan State Oil (PSO).

In the summary sent to the ECC, the Ministry of Petroleum and Natural Resources held PNSC responsible for the petrol crisis in January and revealed that the company was using carriers of other shipping companies to bring oil for PSO in clear violation of the federal government’s decision.

The ministry asked the ECC to intervene and issue directives to PNSC to stop using vessels of other shipping companies. It also sought permission for direct oil import by PSO, another state-owned company, through bidding in order to avoid risks and ensure smooth supplies.

The ECC has sent back the summary to the petroleum ministry for a review.

“The PNSC management is heaping pressure on the government to withdraw the summary, so that they can hold on to the oil transport business and justify the planned purchase of more tankers,” a senior official of the petroleum ministry said.

In 2013 and 2014, the official added, PNSC had also made efforts to buy oil tankers, but the process was marred with allegations of kickbacks and corruption and was then put on hold.

Recently, PNSC came into the limelight again over delay in chartering vessels for bringing oil cargoes to the country. The delay in provision of vessels contributed significantly to January’s petrol crisis and led to criticism of the PNSC management.

“However, instead of learning from this experience and rather than taking corrective steps, PNSC is again failing to provide vessels for oil transportation in a timely manner, sparking fears of another breakdown of the petroleum supply chain,” the ministry official said.

Citing a latest example, the official said motor vessel Red Eagle was supposed to reach Singapore on April 8 to lift a petrol cargo and transport it to Pakistan. However, the vessel reached the Singaporean port on April 13 and set sail on 17th. “This has led to a delay in its arrival date from April 22 to April 28,”

Talking to The Express Tribune, PNSC spokesperson said the vessel Red Eagle reached the loading port early on April 13 and was berthed on arrival.

However, he said, PSO suppliers took around four days to make the vessel ready for sailing with the oil cargo, which was contrary to the best practices that called for loading this size of the cargo within 24 hours.

In another twist, PNSC chairman stated a few days ago that the shipping company would buy two used oil tankers at an estimated cost of $50 million.

However, the petroleum ministry official asked why PNSC was buying the tankers when the country was moving towards LNG/gas import to reduce its reliance on oil.

Published in The Express Tribune, April 26th, 2015.

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Parvez | 6 years ago | Reply Over the many years, chartering of vessels and the fixing of freight levels for the import of oil is a story that would put ' Game of Thrones ' to shame.
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