PSO and Petrosin into Litigation Over The Auto-Gas Station Deals
Pakistan State Oil (PSO) and Petrosin, a Singapore-based company, have entered into a legal battle over scrapping of Rs 10 billion LPG sale contract between the two parties, as the latter has got a stay order from Lahore High Court Rawalpindi Bench, Business Recorder has learnt.
Pakistan State Oil (PSO) Board of Management (BoM) had rescinded its earlier decision of awarding a contract to Petrosin in last week of April for setting up 400 LPG auto-gas stations across the country. The sources said the PSO’s board had earlier approved the deal through a majority vote with Petrosin.
The PSO’s BoM recently gave the go ahead to the management to invite parties for prequalification to participate in the project of LPG supply to the entire net of the autostations. According to sources, Rawalpindi Bench of LHC has issued stay order directing PSO not to proceed with the process of LPG deal as per advertisement given in newspapers seeking parties for pre-qualification till the final verdict of the court. Sources said that the court would resume hearing of the case today (Friday).
Petrosin in its petition said that it had signed an agreement with PSO for LPG auto-gas business through a transparent and competitive process, which was a legally valid and binding agreement. Petrosin maintained that the LPG deal was cancelled due to its litigation with another public sector company, which was not a criterion to disqualify it for the deal.
“We offered best competitive price for the project and PSO management as well as its BoM was fully aware of its litigation with the other company,” the petition said adding that it should not be taken as a reason to scrap the deal.
The project was for setting up of LPG dispensers at PSO’s retail outlets at an estimated cost of about Rs 9 million per station and supply of uninterrupted LPG to motorists for at least five years. Under the deal, Petrosin was to pay Rs 7.03 per kg to PSO and its dealers against Associated Group (AG)’s offer of Rs 6 per kg.
Earlier, PSO had entered into a memorandum of understanding (MoU) with AG for LPG supply at auto stations that could not be translated into an agreement because of differences over pricing and exclusivity rights. However, after the deal between Petrosin and PSO, AG announced in a press release that it was no longer interested in setting up LPG auto gas stations with PSO. It said it was not seeking exclusive rights over LPG sale to motorists.
