LAHORE, Sept 26: The Pakistan State Oil (PSO), reacting to a Wapda statement on the cancellation of the PSO tender for the month of October, said it was not true that the PSO had quoted a premium higher what had been quoted in the past.

He said on Aug 3, the PSO had quoted a figure of $12.95 per metric tone while offer in the second tender on Aug 31, 2002, was $12.09 per metric tone. So, the second offer was even lesser by Rs5.6 million as compared to the first.

“Both the PSO tenders were accepted by Wapda on merit as the rates were the lowest among the competitors, all of whom were international companies.

“It is also absolutely incorrect to say that the OMCs have formed a cartel and they are disregarding the government policies on deregulation.

“It should be noted that the price charged from all customers, including Wapda, comprises five elements — free on board (FoB), premium (freight, blending cost, financial charges, margin), import incidental (LC charges, ad valorem duty, local handling charges, insurance, wharfage), general sales tax and OMC margin, which is just one small element in the whole price structure and was never exorbitant.

“The international prices since July 1, 2000 have steadily gone upward and as a result the furnace oil prices have accordingly risen. The PSO has no control over the international prices. However, the company has also several times reduced furnace oil price since deregulation.

“PSO or, for that matter, no OMC can be blamed for the increase in the cost of electricity. The reasons why the tariffs levied by Wapda and other power utilities in Pakistan are high are known to every consumer and citizen and do not require elaboration.

“Wapda should concentrate on its core activity of generating and distributing electricity, including reduction in line losses and theft — one of the main reasons for high electricity tariff which ultimately the consumer has to bear.”