ISLAMABAD: The Board of Pakistan State Oil Company Limited (PSO) has approved renewal of its Sale Purchase Agreement (SPA) with Attock Refinery Limited (ARL) for five years, from July 1, 2025, to June 30, 2030, with revised supply commitments and tighter controls over petroleum product quality, temperature and quantity measurement.
According to a note submitted for the Board’s decision, the third addendum to the agreement aims to ensure continuity of petroleum product supplies from ARL while strengthening PSO’s commercial safeguards and reducing the risk of disputes over product quality and delivered volumes.
The previous, second addendum expired on June 30, 2025. The two companies subsequently negotiated revised commercial, operational and technical provisions, which were recommended by PSO’s Supply Chain Committee on November 13, 2025, and endorsed by its Management Committee at a meeting held on February 23, 2026.
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The Management Committee, at its meeting on March 26, 2026, directed the Supply Function to place the finalized addendum before the Board of Management for final approval.
The renewal provides for higher monthly volume allocations of selected petroleum products, including an increase in the minimum monthly allocation of Motor Gasoline (PMG) from 12,000–15,000 metric tonnes to 14,000–16,000 metric tonnes. The monthly allocation of MTT is also proposed to rise from 50–100 metric tonnes to 250–300 metric tonnes.
For the first time, the agreement also specifies a monthly supply range of 9,000–11,000 metric tonnes for Jet A-1, providing a defined supply commitment for aviation fuel.
PSO’s note states that the revised terms were negotiated to bring the agreement’s operational procedures in line with current industry practices and improve oversight of the products received from ARL.
Under the arrangements, petroleum products will be required to settle for at least 24 hours before delivery. The temperature of PMG must remain at least 3–5 degrees Celsius below its Initial Boiling Point (IBP), while temperatures of white oil products—including high-speed diesel (HSD), kerosene oil (SKO), Jet A-1 and light diesel oil (LDO)—must remain within five degrees Celsius above or below ambient temperature, based on readings from sensors at ARL’s pumping station.
The revised agreement also establishes more stringent procedures for measuring delivered volumes. Volumetric conversion to litres at 85 degrees Fahrenheit will follow ASTM D4057 and formula C-410, according to the note, with the objective of reducing differences arising from calculations.
Initial and final tank dips, temperatures and densities will be recorded jointly by the two companies. These measurements will serve as the final reference in cases where discrepancies arise between tank measurements and custody-transfer meters.
The safeguards further require ARL’s delivery tanks to be sealed and dedicated to PSO until pumping is completed. PSO will also be entitled to witness tank sampling, with samples tested at its laboratory before loading.
In a related quality-control provision, ARL has confirmed through a side letter that the flashpoint of HSD will remain within the historical range, averaging 64 degrees Celsius, recorded during July 2024–June 2025.
The agreement also provides for independent meter proving every three months, with ARL required to share the relevant data with PSO. A meter drift of plus or minus 0.25 per cent will trigger reconciliation based on tank dips.
To strengthen verification of quantities, weighbridges will be required to carry valid calibration certificates issued by an independent third party and endorsed annually by the Weights and Measurement Department.
The arrangement also provides for PSO personnel to receive annual security cards for access to ARL’s Key Point 1-A installation, with renewals every six months in accordance with ARL’s security procedures.
PSO’s management believes that the revised provisions will improve visibility over product temperature, quality and quantity, while establishing clearer procedures for resolving discrepancies between the two companies.
The renewal is intended to secure a stable sourcing arrangement with ARL for another five years and reduce uncertainty following the expiry of the previous addendum.
The Board has approved execution of the third addendum for the period from July 1, 2025, to June 30, 2030, and authorise PSO’s chief executive officer, or an officer nominated by him, to sign the final document and settle non-material textual changes or minor adjustments required during execution.
The agreement will operate in accordance with the laws of Pakistan.
Copyright Business Recorder, 2026
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