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ECC diverts surplus petroleum cargoes towards Pakistan Railways

Business

July 4, 2019

ISLAMABAD: The country’s decrepit railway services stand to receive a boost in business after the Economic Coordination Committee (ECC) of the Cabinet on Wednesday directed the petroleum division to divert its surplus cargoes towards Pakistan Railways.

The ECC meeting was presided over by Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Abdul Hafeez Shaikh.

“In order to enhance supply of PSO (Pakistan State Oil) products to Pakistan Railways, the committee directed the petroleum division to divert the surplus business to Pakistan Railways that offers lowest freight charges as compared to other modes of transportations,” a government statement said.

Petroleum division briefed the committee about the utilisation of railways services for transportation of petroleum products to upward country.

Loss-making state-owned Pakistan Railways has prime focus on the passenger traffic segment of business, which contributes 55 percent to its revenue. Around 39 percent contribution comes from freight sector. Pakistan Railways daily operates an average of 10 cargo trains and surplus PSO business will be a major boost for its freight revenue.

PSO is market leader in the liquid fuels segment with an overall share of 40.8 percent (white oil 39.2 percent and black oil 48.2 percent) during July to March period of the financial year 2018-19. PSO also maintained the supply chain by importing 47 percent of total industry imports and uplifting 35 percent of total refinery production in the country.

The ECC also approved an amendment in the Port Qasim Authority (PQA) master plan to accommodate prospective third LNG terminal proposed to be developed at Jharri Creek / Chann Wadoo.

Maritime Affairs Ministry decided in December last year to undertake a scientific study, through a third party consultant, and PQA had initiated the process by inviting applications in February to hire a consultant to undertake LNG Zone study.

Issues were being faced in the movement of LNG ships in the existing channel at Port Qasim that repeatedly hampered normal cargo traffic, and traffic congestion was being witnessed due to issues arising out of the incoming LNG vessels.

“The Ministry of Maritime Affairs emphasised about the urgency of establishment of third terminal at Port Qasim Authority so as to meet the gas shortage in the country in the years ahead,” the government statement said. “In order to expedite the process of establishing of 3rd LNG terminal, the committee approved the resolutions of the PQA’s board by exempting the authority from public tendering for appointment of legal consultant through negotiated tendering.” It may be recalled that the ECC in its decision, in February 2019, had directed the Ministry of Maritime Affairs to expeditiously work on setting up of an additional LNG terminal.

The Ministry of National Food Security and Research updated the ECC about wheat stocks position in the country.

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