Islamabad,8th April: With the pandemic fear and a sugar and wheat crisis in the country, there is an emerging fear of oil crisis in Pakistan too.
According to reports of Baaghi TV, the oil marketing companies are now reluctant to buy stocks, and refineries are about to reach closure.
Demand for action against oil marketing companies (OMCs) who refuse to take petroleum products from refineries, is resulting in severe supply problems.
A senior government official told Dawn that the country had 80 or more OMCs operating, but none of them is maintaining its reserves to avoid inventory losses due to slow sales and low prices.
He said that as a result, the pressure on the state-run Pakistan State Oil was increasing, making it difficult to maintain its mandatory stock in various locations across the country. The current shortage is more pronounced in rural areas where wheat harvest has reached its peak.
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In the aforementioned conditions, it is becoming difficult for farmers to obtain direct access to warehouses.
Officials said these poor transportation arrangements are resulting in the exploitation of the farmers by middlemen as they purchase the wheat at lower prices than government-fixed rates.
OGRA has been directed to exercise its powers and impose mandatory stock requirements on all OMCs.
The Petroleum Division had informed the regulators through a policy note that sales of petroleum products have been on the rise since April 1 despite lockdown across the country.
It is noticed, “None of Pakistan Oil’s OMCs are taking satisfactory stock, especially high-speed diesel (HSD), moreover, due to financial gain/loss these OMC’s are not picking up their products from the refineries’.
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As a result, Attock Refinery, Pakistan Refinery and Pak Arab Refinery Company (Parco) are on the verge of closure, while National Refinery and BYCO Petroleum Refinery have suspended their activities.
An official added that it is unfortunate that the refineries have the capacity to store but have stopped their operations and are reluctant to perform their responsibilities under the OMC licensing and marketing rules. He advised that there is a possibility of HSD shortage in the country during the upcoming harvest season in view of the situation mentioned above.
“So to avoid the worst situation, the OGRA regulator was requested to monitor the performance of the OMC and instruct them to maintain 20 days of mandatory stock in their depots,” he said.
Officials said that the consumption of gasoline and HSD has decreased by 60 and 75 per cent respectively during the last two weeks. He added that the use of HSD has caused more harm than gasoline.
A well-known petrol station that used to sell 30,000 litres of petrol in normal days now it is selling 8,000 litres of petrol while its HSD sales have dropped from 15,000 litres to 200 litres per day.
As a result, large refineries have either closed down or are only using up to 30% of their capacity because they have sufficient storage capacity and are reluctant to pick up petroleum products as OMCs are not sold, he said.
The BYCO Refinery and Pakistan Refinery are already closed while the Attock refinery is operating at about 20% capacity and could be closed by the end of this week.
Stay tuned to Baaghi TV for more updates!
