Friday, October 7, 2022

PSO okay with discontinuing fuel supply agreement with Pakistan Railway


Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at

Pakistan Railways has recently revealed that it is mulling the suspension of its contract with Pakistan State Oil. Reacting to the story, PSO spokesperson responded that Pakistan State Oil has been fueling the national economy for the last 45 years, and has been catering to the POL requirements of Pakistan Railways (PR) for more than three decades, as both PSO and Pakistan Railways share the common goal of national progress and growth. In addition, PSO is the only OMC that uses PR for fuel transportation as well, since no other OMC has the capability, or willingness, to do that.

Responding to a question regarding the recent news, he informed that PSO has always supported PR, both operationally and financially, in normal circumstances and in all national emergencies, at times at the cost of the company’s other commitments. Most recently during the ongoing Covid period, PSO continued to supply PR over and above its contractual obligations despite multiple payment defaults and delays. The company also doubled the credit limit extended to PR to Rs.3 billion during this difficult time. Such news coming from them, therefore, is disappointing. He added that both organizations have commercial and contractual obligations which can be reconsidered if required.

With regards to Tax matters, PSO representatives made it clear that all deductions that the company makes are in full compliance to, and in accordance with, the relevant Federal and Provincial Tax laws and we ensure that we follow all Tax regulations that apply to our business.

PSO has continued to maintain that PR can get the required Tax exemptions from the relevant authorities so that PSO can act accordingly.

It is also reported that a consultant review was carried out by PR. PSO responded to the statement by stating that it is encouraging that PR is looking at measures to reduce costs in their system, which will benefit the national exchequer.

All commercial organizations try to ensure that they are as cost-efficient as possible. This applies to both PR and PSO, and both organizations have a right to review all elements of their business with a view to increasing their profitability.

Since PSO is also a national organization, PSO is equally obligated to review all our contracts and business relationships from time to time to ensure the best possible outcomes for PSO, and we will be conducting a similar critical review with regard to our multiple agreements with PR as well.

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