KARACHI, Oct 5: The Pakistan National Shipping Corporation (PNSC) and Pakistan State Oil (PSO) plan to jointly purchase specialised vessels for haulage of Liquid Natural Gas (LNG) and Liquid Petroleum Gas (LPG).
Both the public sector entities also intend to jointly handle white oil in future to save around $2.5 billion in freight per annum being paid by the PSO for haulage of around six million tons of POL products.
This was disclosed by chairman PNSC Vice Admiral Saleem Ahmed Meenai and PSO managing director Naeem Yahya Mir to Dawn on Friday after signing a long term contract of affreightment (COA) for around three million tons of furnace oil for calendar year 2013.
The PNSC since 2002 is handling POL products imported by the oil refineries to meet the annual demand of around 21 to 22 million tons of POL products of the country.
Out of this, around six million tons of POL products are being imported by the PSO but it had been hiring foreign flag ships for the haulage.
The agreement also has the scope of increasing the volume of cargo once the PNSC increases its haulage capacity by purchasing more oil tankers which presently stand at three, and the total number of fleet with bulk cargo and container carriers at 10.
Through this agreement, the biggest national oil marketing company would minimise dependence on foreign flag ships and would also reduce its haulage costs by paying in localcurrency translating into savings worth Rs2.5bn per annum to the exchequer.
The heads of both the entities termed the occasion historic and a hallmark for public sector organisations because the haulage agreement would be beneficial towards the growth of the both and would further enhance their contribution in the national economy.
The Gulf suppliers of POL products to PSO already have haulage arrangements with the PNSC as Kuwait Petroleum has a contract for one million tons and Bakri for two million tons.
Consequently this agreement with the PSO would strengthen the flagship carrier’s business and would help further consolidate their fleet of vessels.
Additionally, this arrangement would have a positive impact on national economy by increasing employment opportunities for sailors and would improve the skill set of the workforce in the oil shipping business, observed both the heads of PNSC and PSO at the signing ceremony held at the PNSC building.
Responding to a question, the PSO chief said that circular debt was not an issue, particularly when the government has given sovereign guarantee and the state-owned oil marketing company, gets funds from the government whenever needed.