The Ministry of Petroleum (MoP) has termed World Bank's demand to phase out freight pool system as impractical, and has decided to continue with the existing system to deliver petroleum products in different parts of the country.
Sources in the Ministry told Business Recorder that World Bank's proposal was discussed at proper forum and finally rejected for the reason that the proposed system would not improve the oil products delivery process.
The phasing out of the FPS had been a longstanding demand of the Bank.
In the first step, it suggested the government and industry that 29 depots be reduced to I8 and to 14 in two phases by the end of fiscal year 2005-06.
It may be noted that average inland freight cost of main petroleum products is in the range of Rs 1.0-1.2/litre. One should recognise, however, that without the freight pool, the difference between the price of diesel in Karachi and Peshawar would be about Rs 1.25/liter (about 6 percent of the HSD retail price.