Six OMCs show-caused after fuel vanishes from outlets

ISLAMABAD: Responding to an artificial shortage of petroleum products created to overcharge consumers, Oil and Gas Regulatory Authority (OGRA) on Wednesday show-caused six oil marketing companies (OMCs), while advising the chief secretaries of four provinces, Gilgit-Baltistan, and Azad Jammu & Kashmir to ensure availability of stocks at retail outlets.

These companies are openly challenging the government’s writ by not supplying petroleum products at their outlets and are retailing them at more than double the price as the prices were slashed against their will.

A few days back these OMCs had openly warned the government that a cut in the prices would result in fuel shortages in the country. Even, through the Ministry of Petroleum Division, these companies had sent a summary to the Economic Coordination Committee (ECC) asking not to reduce prices, but their demand was turned down and the prices were reduced.

Owing to a sharp decline in international crude price, the government reduced petrol price by Rs7.06/litre, kerosene Rs11.88/litre and light diesel oil by Rs9.37/litre for June 2020.

The very next day, these companies claimed they were facing shortages.

A senior official of the Petroleum Division told The News, on the condition of anonymity, that it was purely an artificial shortage and blackmailing. “Let’s see what action the government takes. Their warning was clear, as they were not ready to sell their inventory at low prices and face the inventory losses,” the official said.

He said ironically when prices were increased in the past, these companies earned billions of rupees on their inventories, but now they were not ready for the loss.

OGRA spokesman Imran Ghaznavi said after complaints received through Prime Minister’s citizen portal on fuel shortage at retails outlets, the regulator issued show cause notices to Shell, Attock Petroleum, Total Parco Pakistan, Hascol Petroleum, Gas & Oil (GO), and Puma Energy Pakistan. “Explanation has been sought from them within 24 hours,” Ghaznavi added.

The OGRA has also conveyed to these companies that if they failed in replying to it, the authority shall be constrained to initiate ex-parte proceeding against them, he said.

Ghaznavi in a Twitter post said, “The OGRA has advised Chief Secretaries of Punjab, Sindh, Baluchistan, KPK, Gilgit and Baltistan, AJK and Chief Commissioner of ICT to ensure the availability of oil stocks at the retail outlets of oil marketing companies. In case of any anomaly OGRA may be informed.”

On June 2, OGRA had also directed these OMCs to ensure availability of these products on most immediate basis at their retail outlets, as media reports and the Hydrocarbon Development Institute of Pakistan’s (HDIPs) physical inspection of these companies’ depots and outlets proved that several retail outlets were running dry or were short of products.

The Rules 53 (X) of the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016 obligates every OMC/licensee that “not to abandon any regulated activity as a part or whole, resulting into discontinuation of supply of petroleum products or its sale in any area without the prior written consent of the Authority.”