The agreement was signed during a meeting between Minister for Railways Khawaja Saad Rafique and Secretary Petroleum and Natural Resources Arshad Mirza, said a press release.
Pakistan Railways (PR) transports fuel from PSO to power plants, which has boosted its earnings.
In view of reducing the dependency on road transportation by shifting transportation volumes to other cost effective and environmental friendly modes, high speed diesel transportation to Jamshoro power plant through train wagons will also start after negotiations with Pakistan Railways .
Railways was facing issues on unloading of furnace oil.
Due to less demand, oil was not unloaded at Lal Peer Power Plant Mehmoodkot and Muzaffargarh Thermal Power Plant.
Thus railway tank wagons were used for storing PSO oil. But now a settlement has been made between all three parties; Railways, State Oil and Ministry of Water and Power and according to it if oil is not unloaded, then both parties will pay legitimate fare to Railways.
And there must be accurate forecast of supply and demand of oil used in these power plants.
In the past, the percentage of oil hauling of PSO through railways was only four percent, which has now improved due to determined efforts of the Railways ministry.
The increase was around 10 times more and efforts were underway to further enhance the transportation of oil.