The government of Pakistan Tehreek-e-Insaf (PTI) has reversed a decision of the previous Pakistan Muslim League-Nawaz (PML-N) administration and has decided that the state-run oil and gas companies will give priority to Pakistan National Shipping Corporation (PNSC) in transporting oil and liquefied natural gas (LNG).
In a current meeting, the committee suggested that all government planned cargo including motor gasoline, HSFO, high-speed diesel, LPG and crude oil should be imported on fob origin by government organizations, shipped through PNSC-owned or chartered vessels, and freight should be paid in Pakistani rupees.
Furthermore recommended that over a period of three to five years, all government-to-government LNG imports should be on fob basis, shipped through PNSC-owned or chartered vessels and freight should be paid in Pakistani rupees. It was proposed that in the beginning 15% to 20% of cargoes could be shipped through PNSC during the period.
The committee also suggested that Pakistan flag vessels should be given priority in allotting berths at all domestic ports.
During the conversation, it was recommended that the transportation of government’s strategic cargo should preferably be through Pakistan flag vessels as was being done in regional countries like India, Iran and Bangladesh.
The ECC was knowledgeable that the United Nations Conference on Trade and Development (Unctad) adopted a code of conduct in 1974 aimed at taking into account the special needs and challenges faced by developing countries concerning their shipping needs.
UNCTAD adopted a cargo-sharing formula, also known as 40-40-20 rule, which predetermined that 40% of cargo should be directed to national vessels of the originating country, 40% to vessels of trading partners and 20% to other vessels, thus shielding and developing national shipping lines by way of preferential treatment as a globally accepted practice.
The UN structure for Development of National Shipping Policies recognizes such policies contribute to long-term permanence of the nation and could be used as a means of increasing global trade.
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