Minister for Railways, Sheikh Rasheed, has come up with another plan to boost the department’s revenue. The minister has asked the government to transport oil through Railways at cheaper tariffs rather than building an oil pipeline from Sheikhupura to Peshawar.
The minister floated the proposal in a recent Economic Coordination Committee (ECC) meeting.
During the meeting, the Oil and Gas Regulatory Authority (Ogra) chairperson gave a presentation on tariffs for oil transportation through the pipeline; Sheikh Rasheed suggested oil shipment through Railways at a cheaper rate.
The OGRA chairperson quoted the tariff bid for the oil transportation pipeline given by Frontier Oil Company at Rs. 2,406 per ton – 88% of the current road tariff.
However, the Petroleum Division told the committee that tariff for the oil pipeline to be laid by Inter State Gas Systems (ISGS) would be Rs. 1,075.33 per ton, which is just 40% of the current road tariff.
The Petroleum Division told the ECC that the rate was secured through competitive bidding; however, Frontier Oil refused to accept the tariff, terming them incorrect.
It should be mentioned here that in the past, Pakistan Railways had been transporting oil to different parts of the country.
The oil shipment through railways was not only a cheaper source, but it also provided billions of rupees to the state-owned company. Railways lost its business when the tanker mafia, with the help of people in the power, entered the fray.
If the ECC considers Sheikh Rasheed’s proposal, it will not only provide Pakistan Railways with billions of rupees in revenue but will also stop the financial bleeding.