20000208

Parco allowed to

market its products

on commercial basis

ASHRAF KHAN

KARACHI: The government, as a step towards the deregulation of the petroleum sector, has allowed the 4.5 million tonne mid-country refinery of Parco to freely distribute its different products on commercial basis.

The petroleum marketing scenario is going to be changed significantly by the last quarter of the year when Parco's refinery will enter the oil retail business.

Sources said that the federal government had formally lent full authority to Parco for negotiating its sales on the open market.

The Parco refinery, located at Mahmood Kot, Multan, is expected to come into commercial operation by September next. With its coming into operation as a marketing company, the Pakistan State Oil would face a significant cut in the size of its market in the surrounding zone of the refinery. PSO has long been enjoying major share of the petroleum market under the strictly regulatory regime. It supplies over 8.5 million tonnes of the total 18 million tonne national oil market.

Two other oil marketing companies (OMCs), in private sector- Shell Pakistan and Caltex have been restricted from proceeding with their expansion plans under the existing petroleum regulations they to would be able to enjoy level playing field after the petroleum sector is set free.

Although other refineries in the country are also allowed to market their products themselves, practically only Attock Refinery is availing of the opportunity, sources said. National Refinery, so far the largest refining complex, could not bring its marketing company into operation due to paucity of funds. Pakistan Refinery Ltd. is also selling the bulk of its products though OMCs.

The government had allowed the refineries to form their own marketing companies, under the Petroleum Policy 1997. The mid-country refinery, was supposed to establish its marketing company, they said. Hence, the government has formally extended this facility to Parco as well recently, they said.