Ogra curbs diesel imports amid ample local supply

KARACHI: The Oil and Gas Regulatory Authority (Ogra) has approved the import of two cargoes of high-speed diesel (HSD) by Pakistan State Oil (PSO) for June, instead of the three it requested, and has rejected a similar request from Gas & Oil Pakistan Ltd (GO).

According to sources, a recent product review meeting (PRM) assessed the supply and demand outlook for petroleum products in the upcoming month. Particular attention was given to the local production and import requirements of HSD.

PSO, the state-run oil marketing company, had sought permission to import 145,000 metric tonnes (MT) of HSD under its long-term supply contract with Kuwait Petroleum Corporation (KPC). However, refinery representatives in the meeting maintained that domestic production was sufficient and additional imports were unnecessary. Following deliberations, Ogra approved the import of only 95,000 MT by PSO.

GO, a private-sector oil marketing company with a 40 per cent stake held by Saudi energy giant Aramco, also requested approval to import 78,000MT of HSD. Ogra, however, declined the request, citing the adequacy of local supply.

Industry sources said that Pakistan currently holds around 550,000MT of HSD in stock, with daily consumption estimated at 22,000MT. With the harvesting season now concluded, demand for diesel has declined. “June typically sees a seasonal slump in HSD demand, and this was a key factor considered by the PRM,” said one official.

They added that local refineries are currently producing sufficient HSD to meet domestic needs in the coming month.Pakistan imported 1.7 million tonnes of HSD in the first 10 months of the current fiscal year, with April alone accounting for 246,000 MT due to peak agricultural demand.

“With the harvesting season over and demand falling, Ogra has restricted imports, approving only limited quantities for PSO,” the source added.In recent months, tensions have grown between refineries and oil marketing companies (OMCs) over product offtake and import strategies -- particularly in relation to HSD. These disagreements have prompted the government to consider a legal framework that would introduce binding obligations in supply contracts between OMCs and refineries.