Committee constituted to investigate oil shortage reasons

ISLAMABAD: Government on Monday constituted a committee to probe into the reasons behind oil shortage following an ease in lockdown and verify storage compliance of oil marketing companies.

Director General (Oil) Shafi-ur-Rehman was appointed as the committee’s chairman, while the body comprises representatives of Oil and Gas Regulatory Authority (Ogra), Federal Investigation Agency, Hydrocarbon Development Institute of Pakistan and others as members.

The committee will visit the depot/installations/retail outlets of oil marketing companies (OMCs) and refineries to monitor supply of petroleum products to the petrol stations and availability to the general public.

“If any OMC is found to be hoarding petroleum products then the committee would submit its findings to the relevant authority for appropriate action which may led to the cancellation of theirs marketing licence,” an official statement said after a meeting presided over by Minister for Energy Omar Ayub Khan.

Special Assistant to Prime Minister on Petroleum Nadeem Babar and Secretary Petroleum Asad Hayaud Din also attended the meeting. Representatives of Ogra and OMCs also participated in the video conference to mitigate demand supply challenges.

Khan expressed concern over the petrol shortage across the country due to artificial shortage for profit maximisation that resulted in shortages/ dry outs, having an adverse impact on the lives of the public.

The meeting asked OMCs not to ration supplies of petroleum products to retail outlets. “Government will take strict action against the dealers involved in overcharging and hoarding,” the statement said. “OMCs will not be allowed to cancel or defer their planned cargoes for June 2020.”

Refineries were directed to produce their committed volume of petroleum products. OMCs were directed to move gasoline from Karachi ports to main consumption centers immediately. OMCs were also asked to ensure additional supplies to Malakand, Faisalabad and Hyderabad divisions.

The meeting decided that Ogra might deploy vigilance teams in the field to verify available stocks of OMCs’ depot and retail outlets. The meeting decided that additional production by refineries and imports are as per the schedule to meet the monthly needs. Total 214,536 metric tons of petrol are available in country to meet the country’s need for 10 days, it was told.

Meanwhile, Oil Companies Advisory Council (OCAC) said current stocks of petrol are continuously being replenished by OMCs from supplies being made available through local refineries’ production and regular arrival of vessels carrying imported petrol at the two ports.

“In June, a total quantity of around 850,000 metric tons of petrol is being supplied from the production of local refineries and imports to the distribution and retail network of the country,” OCAC, a representative body of OMCs and refineries, said in a separate statement. “The current sales of petrol in the country are exceptionally high due to easing of COVID-19 lockdown in past few weeks (causing depletion of stocks) and low price of the product.”

OCAC said average sales of petrol for period July 2019 to May 2020 have been around 600,000 metric tons/month, which translates into sales of around 20,000 metric tons/day.

“However, a high surge of sales/consumption of 30,000 metric tons/day has been experienced in first six days of June 2020,” it said. “This sudden increase of 50 percent in consumption is being complemented by the industry through additional imports in the months of June and July. There are few pockets of constrained supplies in some parts of the country.”

The oil industry urged the consumers of petrol to fill up their vehicles as per their normal needs and do not resort to excessive buying in view of adequate quantity of petrol being arranged through the petroleum products supply chain.