ISLAMABAD: Pakistan State Oil (PSO) has sought advice from the government if it could award a contract for import of 325,000 tonnes of petroleum products from a lowest bidder of Indian origin based in the United Arab Emirates.

In a letter to the ministry of petroleum and natural resources, the state-run company reported that Gulf Petrochem Group had emerged as successful bidder for five cargoes of furnace oil, diesel and jet fuel of about 65,000 tonnes each. The company has sought the government advice and the permission to go ahead with award of the contract.

Informed sources said the ministry of petroleum itself was not in a position to take responsibility for a decision that may have political repercussions.

Therefore, it has asked the PSO to refer the case to the ministry of commerce which it considered was the right forum to deal with issues of imports and exports.

Bidder of Indian origin makes lowest offer

A senior petroleum ministry official declined to comment on the issue, saying a question had been asked by PSO which needed to be deliberated upon at the appropriate level.

“Since we have not given a proper answer to the PSO, it would be premature to comment on the issue in public,” he said. Secretary of Petroleum Arshad Mirza was not available for comments.

Another official, when asked by Dawn if oil imports from India were allowed in Pakistan, said the question in the instant case was not the origin of the product because it would be sourced from or blended in Fujairah, UAE, by a company based there but its sponsors being of Indian origin.

He explained that oil imports from India were not allowed previously but some products, excluding High Speed Diesel, were included in the import list 4-5 year ago.

He said the bidder had fulfilled all requirements mentioned in the tender and submitted bid bond. He said the PSO management should have taken a decision at its own, but it unnecessarily shifted its responsibility to the ministry.

PSO has finalised about 20 cargoes of High Sulphur Furnace Oil (HSFO) of 65,000 tonnes each for May 25 to June 30 period, including nine to Bakri, five cargoes to Swiss Singapore, five to Gulf Petrochem and one to BB Energy through sport tender at a premium ranging between $14.98 per tonne freight on board to $20 per tonne FOB.

Pakistan is deficient in furnace oil, premier motore gasoline (PMG) and HSD. Pakistan has been procuring HSD from Kuwait through a long term contract whereas PMG and Fuel Oil are imported on spot tender basis to meet the shortfall.

However, due to oil industry strike in Kuwait last month a force majeure was declared by Kuwait Petroleum Company and PSO floated tender to meet the demand of harvesting season and electricity generation.

In a recently opened tender, a new company Gulf Petrochemical participated and won five cargoes of fuel oil, HSD and jet fuel.

According to Gulf Petrochem Group website, the group led by chairman Ashok Goel and managing director Sudhir Goel had established the oil company in Delhi, India, in 1993 and expanded to UAE in 1998. Other directors of the group included Manan Goel, Prerit Goel, Ayush Goel and Brij Mohan Bansal.

Published in Dawn, May 26th, 2016