The Frontier Works Organisation (FWO) has asked the oil regulator for a plan that would let it recover about $432 million spent on a new white oil pipeline within four years. The project is a joint effort with Pakistan State Oil and Azerbaijan’s state oil company, SOCAR, under a company called Frontier Oil Company.
The planned pipeline will run roughly 437 kilometres. It starts from Faisalabad, goes to Thalian near Rawalpindi, and ends at Tarujabba near Peshawar. One section is a 256-km, 20-inch line that can carry up to seven million tonnes of petrol and diesel a year (expandable later). A second section of 172 km will go further north, and a short spur will connect to Faqirabad.
Under the tariff petition filed with the Oil and Gas Regulatory Authority (OGRA), the transport charge would start at around $64 per tonne in 2029. Over the next 30 years the rate would fall step by step to about $14.5 per tonne by 2058 as the loans are paid off and costs come down. The fast four-year recovery and dollar-linked returns are meant to encourage SOCAR to stay in the project. Some government ministries have raised concerns about the quick payback and the dollar terms.
Right now most petrol and diesel still moves by road tanker. The new pipeline would complete a continuous line from Karachi to Peshawar, cut transport costs over time, reduce road congestion and losses, and make fuel supply more reliable for northern areas. OGRA is reviewing the detailed petition and is expected to decide on the construction-stage tariff soon.