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Petrol likely to get scarce amidst dwindling stocks

ISLAMABAD (Web Desk) Petrol stations started drying up on Friday as stocks plummeted to a critical level.A shortage of petrol looms amidst a spike in consumption, fewer imports, transportation challenges and chronic circular debt.The country’s total usable petrol stocks fell below 130,000 tonnes, which is sufficient for less than five days. Furnace oil stocks were also on the lower side at about 340,000 tonnes. But these were enough for 11 days of coverage for power plants. Kerosene stocks were even lower — enough for around four days. But that raises little concern because of kerosene’s limited usage.

Stocks of all products were significantly less than the mandatory minimum 21-day consumption coverage. There was no apparent problem with high-speed diesel (HSD), the most strategic product for heavy transportation, as its stocks were in the safe zone — more than 530,000 tonnes — and sufficient for more than 21 days.The country had faced a historic supply chain disruption of petrol in Jan 2015, causing transportation problems to the public, despite low international oil prices.

Informed sources said oil marketing companies, including Pakistan State Oil (PSO), were making extra efforts to mobilise stocks evenly to important points to avoid panic-buying. There were reports of petrol shortage in parts of Punjab. Sensing the gravity of the issue, the Oil and Gas Regulatory Authority (Ogra) issued on Thursday an advisory to the Petroleum Division to control the situation. “As per the daily stock position of the Oil Companies Advisory Council (OCAC) dated Sept 14, low stocks (seven-day cover) of petrol are present in the country.

The above position may become critical in the next two to three days in the case of any delay or skipping of any scheduled cargo of petrol,” Ogra wrote to the Petroleum Division.The secretary-in-charge of the Petroleum Division, Sikandar Sultan Raja, did not respond to media calls to comment on the issue. However, Ogra directed his division to advise oil marketing companies to ensure their import plans as decided on Sept 11.OCAC CEO Dr Ilyas Fazil said complaints were received from a couple of areas. “I concede stocks are not as much as they should be,” he said, adding that the upcountry movement of the product had been maximised and the situation was under control.

He attributed the shortages in those areas to the post-Eid tanker availability and phenomenal growth in consumption, but added that the situation was not critical. He said the stock build-up was in process as two ships had been prioritised for berthing at Fotco and Keamari port facilities.In contrast, Energy Ministry Director General (Oil) Abdul Jabbar Memon downplayed the shortage and said that a ship carrying 40,000 tonnes of petrol was now unloading the fuel while another ship of 20,000 tonnes would berth today. Another ship of PSO carrying 60,000 tonnes would be available by Sunday.

He said shortages were reported in some parts due to the lower availability of tankers after Eid holidays.The chief executive of an oil marketing company confirmed that the consumption was notably higher in August than last year. He noted that the Petroleum Division has been showing satisfaction about petrol stocks covering around 11-12 days.He said the law required oil marketing companies to have a minimum of 21-day coverage of all products at all times in addition to the strategic reserves of the armed forces.

The Petroleum Division and Ogra were responsible for ensuring compliance. However, he added that these companies could not be blamed when the market leader, PSO, had more than Rs285 billion worth of receivables and that too from the public sector mostly.He said the petrol consumption in August surged 24pc to 680,000 tonnes against last year’s 548,000 tonnes.PSO has been facing cash constraints with international obligations standing beyond Rs62bn as of Sept 5.

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