Ogra reports depletion of HSD stocks fuelled by increased demand

KARACHI: The Oil and Gas Regulatory Authority (Ogra) announced on Friday that high sales of high-speed diesel (HSD) have depleted stocks previously reported as adequate by refineries. Current reserves are now sufficient to meet only 19 more days of national consumption, according to the latest sales and stocks report.

In response to reports suggesting the country is carrying healthy stocks of HSD and that there is no need for further imports, Ogra clarified that HSD sales in October 2024 have surged by 21 per cent compared to projected figures. This increase is attributed to the federal government’s anti-smuggling drive and the onset of the agricultural season.

Since September, Ogra has proactively built stockpiles in anticipation of the agricultural season, scheduled maintenance shutdowns at Pak Arab Refinery Limited (Parco), and an expected rise in demand due to robust government actions against illegal fuel smuggling. This strategy has resulted in higher stocks, which faced temporary media criticism from certain industry players. However, the strategic buffer created by Ogra has proven instrumental in maintaining supply continuity and preventing potential shortages, underscoring its commitment to ensuring national energy security.

During the monthly product review meeting for November 2024, held on October 22 and attended by CEOs and managing directors from the oil industry and representatives from the Ministry of Petroleum, it was decided to allow the import of approximately 266,000 metric tonnes of HSD to address the deficit in November. This is particularly crucial due to the agricultural season, as Parco -- contributing nearly 50 per cent of the country’s refinery production -- will be offline for 40 days.

Ogra’s mandate requires it to strive for steady fuel supplies and prevent potential shortages. The planning process for HSD imports mirrors that of other petroleum products, with volumes assigned to oil marketing companies based on their sales projections, local availability, and inventory levels. This is an ongoing process, with corrective actions taken whenever there is a significant divergence from the plan. Ogra continuously reviews the national oil supply chain situation every 10 to 15 days to make necessary adjustments as required by market behaviour.