close
Tuesday March 19, 2024

Oil crisis?

By Editorial Board
December 12, 2017

Is Pakistan heading towards another crippling oil shortage like January last year? If it is, there will be no excuse to offer this time. The warnings from the oil industry have been coming since mid-November that a crisis is looming. Jet fuel shortages have now already started to hit airports. A full month has passed but the issue causing the crisis has not been dealt with. The Oil Companies Advisory Council has issued an SOS to the petroleum division over the expected closure of local refineries, which would create a shortage of fuel. The closure of furnace oil-based power plants in October is said to be the trigger behind the shortage. One wouldn’t think that the closure of oil-based power plants would affect the supply of other petroleum products. However, the oil refining process produces a range of products from crude oil. It is unsustainable to continue to refine oil if one of the products of the process – furnace oil – is not being used. It is rather bizarre how the impact of what in principle could be a good decision – not to use furnace oil-based energy – has consequences that no one in government seems to have anticipated.

The current shortage in jet fuel could spill over into other petroleum products. Urgent jet fuel supplies have been ordered, but the point is that this is a rather a silly situation to be in. The shortages were predicted weeks ago and supplies should have been ordered before the shortage actually hit us. PSO has apparently told the government that the situation is so bad that it could be compelled to issue a hazard notice to flights going along certain routes; this could affect flight safety. One possibility of finding a way out of the situation could be the government purchasing and storing the furnace oil being produced now at a cheaper price and storing it for use in the summer when the demand is higher. This would cut out the need for imports later but the shortage capacity simply does not exist. It is clear that poor planning is to blame once again, with the authorities increasingly looking like they have been caught completely unawares. Were no lessons learnt from the crippling fuel crisis of January 2016? Heads may roll – at times – but the process remains as flawed as before. The warning of a larger petroleum product crisis has been delivered. Any failure now is the responsibility of the planners.