PSO facing hurdles in furnace oil supply to power sector

KARACHI - Pakistan State Oil (PSO) is dealing with number of constrains while supplying furnace oil to power sector in the country, according to PSO report. It is worth mentioning that PSO is the major supplier of furnace oil to the power industry. PSO has the loins share in oil market, as it covers 71pc of oil supply. During current energy crisis, government has directed PSO to supply uninterrupted furnace oil to the power generating plants. But PSO is facing hurdles in supply activities. Petroleum products are imported in the country and PSO is witnessing port constrains as HSFO is imported only at FOTCO Jetty due to infrastructure built and GoP guarantees. The capacity of FOTCO is 9.0m MT /year or 750,000 MT /month. HSD is also imported at FOTCO after commissioning of White Oil Pipeline (PAPCO) and the HSD deficit in the country is 4.5m MT or 375,000 MT/Month. Crude Oil for BPL is imported at FOTCO 130,000 MT/month. Thus 20 tankers will be handled at FOTCO against a capacity of 15 tankers, which will result in port congestion and un-necessary demurrages on the vessels. Moreover, there is no night navigation facility available at PQA. It is pertinent to mention here that there is limited average refinery production of 300,000 MT/month, which results in increased reliance on imports. PSO also face logistic constrains as limited Tank Wagons and locomotive availability by Pakistan Railways cannot move more than 4,000 MT/day. Product movement through road is possible but carries high risk due to volatile law and order situation in the country. Projects for supply of furnace oil through pipeline could only be materialised subject to its financial viability to OMCs Moreover, the WAPDA constrains are also cumbersome tendering procedure every fortnight causing delay in placement of orders and commencement of supplies. Delay in establishment of Letter of Credit is also a problem, without which supplies cannot commence. 4-5 days are being wasted on a monthly basis as no supplies could be made due to this procedure.

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