Oil industry protests Railways’ tender specs favouring imported diesel

ISLAMABAD: The oil industry is protesting the Pakistan Railways’ “strange tender specifications”, which practically bar the procurement of high-speed diesel (HSD) from local refineries and, instead, favour imported products at a substantial foreign exchange cost.

Adil Khattak, chairman of the Oil Companies Advisory Council (OCAC) and CEO of Attock Refinery Ltd, has formally complained to the government over Pakistan Railways’ tender “for meeting its HSD requirements and contested by different oil marketing companies (OMCs) in the country”.

In a recent communication to Pakistan Railways’ Secretary and Chairman Mazhar Ali Shah, Mr Khattak pointed out that the tenders require a minimum flash point of 66 degrees Celsius, which is meant for only imported HSD. In contrast, the approved specification for HSD produced by the local refineries is 54 degrees Celsius minimum.

Says PR requires minimum flash point of 66 degrees Celsius compared to 54 degrees for local HSD

“This anomaly rules out the use of locally produced diesel by Pak Railways, making it dependent on imported diesel. This issue has been pending for resolution for the last many years despite various correspondence and meetings by the local refineries with Railways authorities,” Mr Khattak wrote.

He said the local industry was unable to understand why Pakistan Railways is adamant about using the 66-degree specification when many countries like the United States, Canada, European Union, Japan, China, South Korea, India, and South America use the same or even lower flash point specs than Pakistan’s for their locally produced diesel.

He said the local industry had also provided copies of Indian Railways’ tenders specifying a flash point of 35 degrees Celsius, much lower than Pakistan’s standards for locally produced diesel. “Even Pakistan Railways’ own technical committee confirmed in May 2021 that there is no issue with using 54 degrees Celsius flash point HSD, but the matter still remains unresolved,” Mr Khattak complained.

Mr Khattak said that he personally followed up with the past Railways ministers and CEOs, but for some unexplained reason, the anomaly persists, causing not only a loss of precious foreign exchange but also making a strategic asset dependent on imported fuel.

Pakistan Railways Chairman Mazhar Ali Shah did not respond to requests for comments.

The oil industry informed the Ministry of Railways that HSD produced by local refineries met all the performance specifications required for high- and medium-speed diesel engines of Pakistan Railways.

It said the only parameter which is not as per Pakistan Railways tender is the flash point, which is not a quality parameter and does not have any effect on the engine performance and is primarily required for safety in handling and use.