ISLAMABAD: The Petroleum Division has withdrawn a summary from the Economic Coordination Committee (ECC) of the Cabinet regarding the allocation of condensate to Attock Refinery Limited (ARL) and adjustment of its freight charges through the Inland Freight Equalization Margin (IFEM), without providing any official reason, sources told Newzshewz.
The summary was originally part of the ECC agenda for its May 14, 2025 meeting, but it was not taken up. On June 2, 2025, the Petroleum Division formally withdrew the summary, reportedly due to concerns that the proposals were unlikely to be approved.
According to the withdrawn proposal , Petroleum Division had sought increase in freight charges by 30 per cent to Rs 1,490/ per barrel from Rs 1,143.95 per barrel for transportation of condensate by ARL as the key oil transporting companies have declined to accept the existing rate.
The details shared in the summary reveal that the Economic Coordination Committee (ECC) of the Cabinet considered a summary on allocation of condensate to Attock Refinery Limited (ARL) and its freight charges through IFEM submitted by Petroleum Division on June 26, 2023. The decision was ratified by Federal Cabinet on July 26, 2023. Subsequently, Petroleum Division submitted a summary to ECC on February 5, 2024 for slight revision of the above decision and ECC on February 7, 2024 approved the proposal contained. The decision has been ratified by Federal Cabinet on February 15, 2025.
The approved decision is reproduced as under: (i) 5,000 BPD condensate may be reallocated to Attock Refinery Limited (ARL) from UEPL’s Naimat Facility ;(ii) freight charges of the condensate supplies will be Rs 1,143.95 per barrel, which may be increased or decreased by 3.5 % in case of 10 % increase or decrease in the ex-depot sale price of High Speed Diesel (HSD) prevailing on the date of ECC approval and ;(iii) out of the above freight charges, the applicable transportation charges/rate being paid by UEPL for transportation of condensate from Naimat Facility to the nearest refinery will be deducted to arrive at net freight which will be paid to ARL through the IFEM mechanism by OGRA.
According to Petroleum Division, the freight rate was acquired by ARL by inviting bids from the leading transporters whereby National Logistic Cell (NLC) remained as the most competitive i.e. offering 1,143.95 per barrel transport of crude oil to ARL from United Energy Limited’s Naimat Facility in Sindh. The decisions were conveyed to Oil and Gas Regulatory Authority (OGRA) and ARL for implementation . However, ARL has now conveyed that NLC declined to validate the offered rate of Rs. 1,143.95 per barrel due to massive changes in the market dynamics and thus proposed a new rate i.e., Rs 3,000 per barrel. Consequently, the second lowest bidder i.e., M/s Rawal Logistics was offered to match the approved rate, however, they also expressed their inability to comply and proposed Rs. 1,700 per barrel.
Resultantly ARL was advised to carry out fresh competitive bidding. Result of the fresh bidding, whereby M/s Pakistan Tankers Company remained most competitive and quoted freight rate of Rs. 1,490 per barrel based on the HSD prices effective from August 16, 2024 subject to increase/ decrease by 3.5 percent with the fluctuation of diesel price by 10 percent.
The comparison shared with the Petroleum Division indicates that there will be a net freight cost saving of around Rs 110.97 million per month obtained on account of reduction of transportation cost of petroleum products.
PD in its summary, now back to the files, had proposed that in view of the forgoing, the previous ECC decision may be revised (i) 5,000 BPD condensate may be reallocated to ARL from UEPL’s Naimat Facility ;(ii) freight charges of the above condensate supplies will be Rs 1,490 per barrel, which may be increased or decreased by 3.5 % in case of 10 % increase or decrease in the ex-depot sale price of HSD effective from August 16, 2024 ; and (iii) out of the above freight charges, the applicable transportation charges/rate being paid by UEPL for transportation of condensate from Naimat Facility to the nearest refinery will be deducted to arrive at net freight which will be paid to ARL through the IFEM mechanism by OGRA.
Ends
