ISLAMABAD, Jan 18: The Pakistan State Oil (PSO) has asked Wapda to concentrate on producing energy on cost effective basis instead of indulging in oil business.

“The PSO has offered on several occasions to supply fuel oil to Wapda on cost-plus margin basis so that Wapda, as utility company, should concentrate on producing energy on cost effective basis and should leave the import of oil, being highly specialized field, to the oil companies,” said a PSO letter.

It further stated that Wapda should abide by the ECC decisions to clear all PSO dues. It said that the government had decided a couple of years back to shift the POL products handling from Keamari to Port Qasim due to various concerns especially shown by the Pakistan Navy.

Under the decision, the PSO invested Rs1.7 billion for storage and handling facilities of petroleum products at Bin Qasim. Other oil companies, said the PSO, did not honour the government decision and one of them even sold its prime land at Port Qasim.

Following government’s deregulation in Feb 2001, it allowed import of HSFO at Keamari which put the PSO at a marketing disadvantage as the import of HSFO at Keamari was lower by $4.5 per ton otherwise payable on the import of product at FOTCO.

The PSO opposed the decision because of use of edible oil storage tanks by the oil marketing companies against API and explosive and health safety rules to store HSFO for Wapda at Keamari was serious violation of rules and regulations.

It also opposed water ballast line which the oil marketing companies utilized to pump high temperature and pressurized petroleum products in violation of environmental safety factors.

Another issue with regard to handling of HSFO at Keamari in the recent past was greatly increased movement of tank lorries in Shireen Jinnah Colony, Clifton, defence and other congested areas with tank lorries creating traffic hazards and environmental pollution.

The parking of tank lorries which was recently shifted from the Shireen Jinnah to Zulfikarabad oil terminal could again return to the Shireen Jinnah colony and create traffic hazards and enhance environmental degradation if HSFO was imported there.

The PSO said that the import of HSFO at Keamari also caused a loss to the Fauji Oil Terminal on which the Fauji Foundation had made major investment and the terminal would remain under-utilized.