Apropos a news item "OMCs told to report their sales to PSO, Shell and Chevron: refineries accused of aiding in misdeclaration", carried by Business Recorder on July 08, 2010, the following is an APL (Attock Petroleum Limited) clarification: "Firstly, the decision taken by Ogra regarding physical reporting of vehicles at Tarujabba and Juglot depot was not only for refinery backed OMCs, rather it was implemented to verify movement of product on long haulages.
"Since APL's entire product requirements to Tarujabba Fed Area are met from Sihala based refinery hence we do not contribute to the increased freight cost on account of product movement (from Mehhmodkot to Tarujabba). APL is feeding Tarujabba fed region from Sihala therefore we incur freight cost of Rs 0.55/Liter where as all of the remaining OMC's incur a freight cost of Rs 1.89/liter for their movement of product from Mehmoodkot to Tarujabba. Here it may be noted that APL has a market share of 5 % by virtue of simple logic, it can be easily deduced as to who is actually burdening the freight pool cost.
"An abnormal increase in sales of OMCs who are feeding Tarujabba from Mehmmod Kot, was observed and hence it was decided by OGRA in the IFEM meeting, held on 25th and 26th May 2010, to start physical reporting of all OMC vehicles for the necessary verification at both these destinations (Tarujabba and Juglot) from June 01, 2010.
"Further it may also be noted that APL is not selling more than industry average at Tarujabba. This is also evident from later portion of the captioned Business Recorder report which is itself falsifying the earlier part, as it has stated that APL's average at Tarujabba is 92 kilo liters and industry average is 95 kilo liters, hence it can be witnessed that APL's contribution to the freight pool Cost is less than that of industry.
"Secondly, in certain road zero freight areas, APL's average is a lot higher than industry average. This can be further substantiated from the news report published in Business Recorder on June 26, 2010 that industry average at Machikey is 125 KL's and APL's average is 232 KL's.
"Ogra has asked all the OMCs to report their respective vehicles at PSO, Shell and Chevron depots, as these are the only OMCs which have the infrastructure available in this area. As for Juglot, vehicles had to report to the PSO depot as it is the only depot available there. Therefore, valued readers must now know that depots of the above mentioned OMCs have been utilised not because they have been selected as arbitrators, rather only because they have physical presence in Tarujabba and Juglot.
"Similarly, as for physical reporting to Sihala, APL has also been nominated as a depot for physical verification of other OMC vehicles moving product from Machikey to Sihala fed region. This selection has again been made on the basis of physical and geographical presence of a certain OMC in a given region. Currently we are hosting three OMCs at our Sihala depot (HASCOL, OOTCL & BTCPL).
"APL's good faith can be judged from the fact that we were the first company to send its team to Tarujabba and Juglot and support the implementation of transparency imposed by the current regulatory regime. "APL reiterates its firm commitment to operate in a free market structure where lawful regulations of the competent authority should not be challenged and is of the view that performance of other OMCs can not be taken as a benchmark for evaluating APL's performance.
"The increasing market share of new entrants is a good sign for the country, as increased competition always makes the consumer better off. APL has been a responsible company in the past and will be so in future. Therefore we are very ambitious to set benchmarks for oil industry in both sales volume and corporate social responsibilities.
"As for Juglot, vehicles had to report to the PSO depot as it is the only depot available there. Therefore, valued readers must now know, that depots of the above mentioned OMCs have been utilized not because they have been selected as arbitrators, rather only because they have physical presence in Tarujabba and Juglot," the clarification concludes.