PM orders inquiry into low uplift of locally refined oil products

KARACHI: The prime minister has ordered an inquiry into the low offtake of domestically refined petroleum products by oil marketing companies (OMCs).

A committee has been formed to investigate the sub-optimal capacity utilisation of oil refineries and the resulting decrease in the supply of critical petroleum products, according to a notification issued by the Ministry of Energy’s Petroleum Division.

The notification said that the prime minister has nominated Minister of State for Railways Bilal Kiyani to lead the inquiry into the matter. The terms of reference (ToRs) of the inquiry include analysing the reasons behind the low offtake of domestic petroleum products by OMCs, which has led to increased imports.

The committee will also examine the effectiveness of the current system for planning and forecasting monthly import requirements of petroleum products, and assess the balance between domestic production and imports.

The inquiry will further evaluate whether the Pakistan (Oil Refining, Blending, Storage, Transportation and Marketing) Rules, 2016 -- specifically Rule 35(g) -- are being implemented in letter and spirit, based on available data on OMC sales and refinery inventories. If non-compliance is identified, the reasons will be explored.

During a recent meeting, the committee instructed stakeholders to come prepared with an overview of the issue and their specific perspectives on the ToRs. It also sought suggestions and recommendations for improving the current mechanism for pricing and managing the petroleum products supply chain, with a focus on planning, forecasting, upliftment and imports.

In April, refineries raised concerns about the low offtake of high-speed diesel (HSD), which led to the shutdown of one refinery unit and reduced capacity operations at others. They urged the government to act to ensure the smooth uplift of HSD to maintain refinery operations.