KARACHI, April 5 The Pakistan State Oil has decided to take more local and foreign investors on board for setting up LPG auto-gas stations in the country.

A senior official in the PSO said that a UK-based company has also shown interest in LPG auto gas project.

There is some uneasiness in the market over the signing of agreement with some companies and the PSO.

On April 5, a special PSO board of management meeting was convened at the PSO House in which the board advised the oil marketing company to provide a level-playing field to all parties and encourage investment in the LPG auto-gas sector.

The PSO board also directed that more avenues be created for all players to generate investment and employment opportunities in the country.

The management was advised that while creating a level-playing field the minimum benchmark approved by the PSO board should be maintained and the entire process should remain transparent in the best interest of the company and country.

However, the PSO official did not give a clear hint as to how more foreign and local players can enter in the auto-LPG business with the PSO.

The official said that the investment cost for only equipment at one station ranges between Rs8-9 million, excluding infrastructure development cost.

PSO has 3,400 stations all over the country.

In view of rules of OGRA these LPG stations should not be opened in congested and residential areas, it is being assumed that half of the total PSO stations may fall in this category.

On March 29, PSO signed an agreement with M/S Petrosin whereby the party shall arrange and supply LPG to PSO's auto gas stations. The party shall also invest in the infrastructure for the establishment and operation of selected PSO's auto gas stations.

Meanwhile, Associated Group (AG) on Monday withdrew its interest in setting up LPG auto gas stations at PSO network.

A G's LPG marketing company Lub Gas had been in negotiations with PSO for the utilisation of latter's retail outlets on a non-exclusive basis to sell LPG to motorists as auto gas. The negotiations were abruptly concluded after no agreement could be arrived at mutually acceptable commercial terms, the spokesman of AG said.

PSO had approached Lub Gas in writing on March 30, offering the company to set up LPG auto gas stations at PSO sites. Lub Gas through its letter of April 1, informed PSO that it could not proceed in the absence of the financial details of the agreement.

LPG RATE

The price of LPG declined to Rs73 from 75 per kg in Sindh on Monday following slight fall in Saudi Aramco Contract Price by $2 per ton to $717 per ton. In Punjab, the retail price has come down to Rs73 per kg and it is at Rs76 in NWFP.

Chairman All Pakistan LPG Distributors Association Abdul Hadi Khan said due to slowdown in sales, many distributors had been hesitating in lifting gas for the last six months.

He said that the demand of gas is now 1,500 tons per day as against production of 1,600-1,700 tons. Around 200 tons of LPG is arriving from Iran illegally, which means the markets have 300 tons a day surplus stocks. Owing to thin demand the marketing companies are decreasing their prices.

Pakistan has imported around 17,000 tons of LPG from Jan 2010 to-date, he added.

E-10

A PSO spokesperson claimed that the company had resumed sale of ethanol blended fuel (E-10) at only 30 outlets instead of 38 as planned in some main cities of Sindh. A pump owner, who had previously sold E-10 in January this year, said it may re-start sale within next two days as the supply is expected shortly.