FIA starts probe into Rs2.3 bn oil scam

ISLAMABAD: The Federal Investigation Agency (FIA) has launched a probe into the import of 65,000 tons of Low Sulphur Furnace Oil (LSFO) worth Rs2.3 billion by the Pakistan State Oil that was unfit for power generation, a spokesperson for the state-owned oil marketing company confirmed.
Sources said the inquiry had panicked those officials who are being brought into the net.
They claim innocence and blame the top management. However, the spokesperson denied the involvement of the top man of the entity.
Official sources said there was no doubt that corruption and inefficiency were continuing to haunt the PSO, as last year a vessel containing substandard fuel was imported, that issue was brushed kept under the carpet.
The PSO is now experiencing another scamof $2.3 million, with its monstrous spillover effects of Rs1.5 billion on the national economy. A vessel, carrying 65,000 ton low sulfur furnace oil, arrived at the Karachi port on April 2, but the whole consignment was found substandard and unfit for power generation. The LSFO is used in power plants to generate electricity and it has already been detected by Nepra many times during the hearing of petitions that some of power houses had virtually become oil guzzlers and inefficient mainly because of the substandard fuel. Owing to the use of off spec fuel power tariff also increases which is the main cause of unsustainable cost of doing business in Pakistan. A USAID report has already detected that the mafia involved in this filthiest business earns about $400 million per year inflicting a huge loss on the national economy.
The PSO is now moving the product to its Lalpir depot where it will be blended with additives to bring it up to specification and supplied to the customer (Kapco) at normal rates/no additional cost. Kapco that runs on LSFO has refused to accept this fuel arguing it will not only damage the machinery, but will also reduce the efficiency of the plant. However, there are reports that high-ups in the relevant ministries want to get the fuel utilized by power sector after it gets treated with additives.