LAHORE: The Pakistan State Oil (PSO) on Friday announced that it will conduct a critical review with regard to its multiple agreements with Pakistan Railways (PR).

Reacting to Railways plan to terminate fuel oil supply agreement with the country’s largest oil marketing company (OMC), a PSO spokesman said that all commercial organisations try to ensure that they are as cost efficient as possible.

“Both PR and PSO have a right to review all elements of their business with a view to increasing their profitability. PSO is equally obligated to review all our contracts and business relationships from time-to-time to ensure the best possible outcomes for PSO,” the spokesman said in a press statement.

The spokesman, however, said it was encouraging that the Railways is looking at measures to reduce costs in their system, which will benefit the national exchequer.

“PSO has been catering to the petroleum, oil and lubricants requirements of Railways for over three decades. In addition, PSO is the only OMC that uses Railways for fuel transportation as well, since no other OMC has the capability, or willingness, to do that.”

“Most recently during the ongoing Covid period, PSO continued to supply PR over and above its contractual obligations despite multiple payment defaults and delays. The company also doubled the credit limit extended to PR to Rs3 billion during this difficult time.”

He added that both organisations have commercial and contractual obligations which can be reconsidered if required. He said all tax deductions that the company makes are in full compliance to the relevant federal and provincial tax laws.” PSO has continued to maintain that PR can get the required tax exemptions from the relevant authorities so that PSO can act accordingly.”

Published in Dawn, July 10th, 2021