PNSC says PSO owes Rs1bln on demurrage, freight charges

KARACHI: The state-run Pakistan State Oil (PSO), which is feverishly importing oil products to meet growing energy demand, owes at least one billion rupees to Pakistan National Shipping Corporation (PNSC) on account of demurrage and freight charges, claimed a top official of the shipping line.
“PNSC’s receivables of Rs1.0 billion are on account of demurrage and approximately Rs5.0 million due to freight charges against the PSO,” said Brigadier Rashid Siddiqui, director at PNSC said on Monday.
“Being a national flag carrier, it is our responsibility to transport strategic cargo and we are doing our job despite all odds,” Siddiqui said.
He said PNSC also transports defence strategic cargos. “We have a track record of transporting crude oil for refineries and PSO.”
A PSO official, however, complained that the PNSC failed to transport the cargoes on time.
“The shipping line made delayed deliveries of around 80 vessels during the last two and half years,” the official, requesting anonymity, told The News.
Siddiqui, however, argued that the delay was due to the frequent rescheduling by the PSO.
“PSO frequently modifies the schedule; even the ports of loading are changed at the eleventh hour, which makes it quite difficult for the PNSC to make prompt arrangements,” he said.
“Our vessel MT Shalimar is docked at the loading port since June 06, 2015 due to cargo quality dispute between PSO and suppliers.”
On freight rates, Siddiqui said the contract of affreightment was signed with PSO in January 2013 and therefore, the rates have to be brought at par with the market rates every year.
“The rates were to be revised in January this year, but it did not happen for one reason or another,” he said. “We are still transporting the cargo at old rates for PSO, despite a hit on our resources.”
The PSO official said the carrier is not certain about the actual freight rates, referring to the PNCS’s pitching five different offers in the last six months.
Siddiqui informed that the PNSC reached an agreement with the PSO on a formula to determine the rates. However, the top management of the oil company and the ministry of petroleum and natural resources didn’t vet the accord.
Industry sources said the PNSC is willing to continue doing business with the PSO on freight on board basis, while the petroleum ministry wanted procurement on cost and freight basis.
They fear that the rift between the two state-run companies might expose the country’s fuel supply chain to a potential collapse.