The government is likely to approve a 30% increase in Attock Refinery Limited’s (ARL) freight charges—from Rs 1,143.95 to Rs 1,490 per barrel—for transporting condensate, after major oil transporters refused to accept the previous rate, sources told.
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According to details, the Economic Coordination Committee (ECC) of the Cabinet had initially approved a summary on June 26, 2023, regarding allocation of 5,000 BPD condensate from UEPL’s Naimat Facility to ARL, along with freight charges of Rs 1,143.95 per barrel. This decision was ratified by the federal cabinet on July 26, 2023.
A revised summary was submitted by the Petroleum Division on February 5, 2024, and approved by the ECC on February 7, 2024. The Federal Cabinet ratified the updated decision on February 15, 2025.
As per the approved terms:
- Freight charges could vary by ±3.5% with a ±10% change in the ex-depot price of High-Speed Diesel (HSD).
- UEPL’s current transportation cost would be deducted to calculate the net freight payable to ARL via the Inland Freight Equalization Margin (IFEM), managed by OGRA.
Initially, ARL awarded the contract to National Logistic Cell (NLC), the lowest bidder, at Rs 1,143.95 per barrel. However, NLC later withdrew due to market volatility, proposing a new rate of Rs 3,000 per barrel. The second-lowest bidder, M/s Rawal Logistics, also declined to honor the old rate and proposed Rs 1,700 per barrel.
Following this, ARL was instructed to conduct fresh bidding. The latest tender was won by M/s Pakistan Tankers Company, which offered a rate of Rs 1,490 per barrel, adjustable by ±3.5% based on diesel price fluctuations effective August 16, 2024.
According to Petroleum Division estimates, this new arrangement will result in monthly savings of approximately Rs 110.97 million in transportation costs.
In light of these developments, the ECC is expected to revise its previous decision and formally approve the new freight rate and associated terms.
