Tuesday March 21, 2023

OCAC seeks retail outlets’ ceiling revision on HSD storage capacities

January 08, 2023

KARACHI: Oil Companies Advisory Council (OCAC) has sought the revision of formula for calculating retail outlets’ ceiling on the basis of back-up storage capacity of high speed diesel and development of supply methodology to AJK.

OCAC in a letter to the Oil and Gas Regulatory Authority (OGRA) highlighted that the revision of prevalent formula for calculation of retail outlets ceiling based on the backup storage capacity of HSD should be in addition to petrol storage.

The council said that in addition to Mogas storages, HSD storages should be taken into consideration by OGRA based on 40 million tonnes per day sale formula per retail outlet development.

OGRA’s permanent license holder's cumulative

country wide storages should be taken into consideration and they should be allowed to develop retail

outlets across the country based on their total

storage capacity of both petrol and diesel, the letter said.

About the development of methodology for supply of POL products to AJK from oil depots [Machike, Rawalpindi (Sihala/Morgah/Thallian), Chakpirana and Faqirabad] situated in Punjab, OCAC said that AJK was a special fed area and there were total 149 retail outlets operated by 11 oil marketing companies.

It should be noted that AKJ has been declared as disputed territory by UNO, and no oil marketing company in the country has developed any storage / depot in the region of AJK. However, AJK was currently being fed from Punjab, mostly from Chakpirana Sihala and Machike based on storage capacity in the province. The letter said that the OMCs should be allowed to develop retail outlets accordingly.

The oil council also requested OGRA to issue directives on the same on urgent basis in order for necessary development of HSD storages and infrastructure by oil marketing companies for retail outlet development.

However, another representative body of OMCs ie oil Marketing Association of Pakistan (OMAP) believed that OMCs were not able to acquire land in AJK and there were certain hurdles and multiple restrictions on building storages in the disputed region.

Keeping in view this scenario, OGRA should allow the oil marketing companies to establish and feed retail outlets in AJK based on their storages in Punjab that surrounds AJK from three sides and was currently acting as the nearest and economically possible supply point to the region.