Govt seeks private investment to double fuel reserves

KARACHI: The government decided to lure private investments to double the country’s oil storage capacity from the existing 20 days in a bid to avert any possible domestic shortfall, petroleum minister said on Wednesday. 

“Investors will be given incentives accordingly,” Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said, speaking at a formal inauguration ceremony for Pakistan State Oil’s (PSO) new range of gasoline.

“The country needs to have fuel storage capacity much more than the existing 20 days.”

Abbasi said the government planned to push for expansion in fuel storage capacity by private oil marketing companies as well as invite investors to set up storage houses.

Local consumption of motor spirit (petrol) hovers around 0.55 million tons a month while that of high speed diesel is around 0.75 million tons a month. In addition, the country monthly consumes 0.80 million tons of furnace oil.

“Since (oil) demand is increasing at a fast pace inventory also needs to be enhanced,” Abbasi said. Early this month, the PSO made new fuels available at its stations nationwide.

New gasoline Altron Premium is sold at Rs64.52/litre and Altron-X High Performance at Rs76/litre. Sheikh Imran-ul-Haq, managing director at PSO said the company continues to be the industry leader, setting new market trends. 

New petrol will be available in different colours to overcome adulteration. “The launch of higher grade/RON (research octane number) fuels is another testament to PSO’s commitment to effectively meeting the changing needs of our customers and delivering them the best quality products,” Haq said.

There are 17 oil marketing companies operating in the country. The flagship oil marketing company holds more than half of the fuel market share. 

Industry officials said the companies are not even maintaining the current mandatory storage level. Volatile international oil prices keep the inventory losses at the higher side all over the world.

The officials said state-owned oil marketing company, mired in receivables, need financing to expand its storage.   They said the government also planned to create an energy fund to increase storage for strategic fuel reserves to at least 45 days.