POL supply crisis exposes PSO to losses of Rs17 bn

ISLAMABAD: The state owned oil marketing company (OMC) -- Pakistan State Oil (PSO) -- suffered the loss of Rs16-17 billion in the ongoing POL availability crisis in the country because of refusal by other oil marketing company to share the losses. The OMCs denied bringing the POL products in the market to avoid the inventory losses when ECC refused to maintain the POL prices and instead reduce the price triggering the availability crisis in the country.

Resultantly, the burden of loss got shifted to state owned entity which is why PSO losses are hovering in the range of Rs16-17 billion. And even after the lapse of 14 days, there are still many pockets of the country which is 30 percent of the country area is still devoid of POL products of availability.

“Yes, PSO braved the loss of Rs16-17 per liter on one litter of petrol as OMCs have refused to share the burden of losses because of further reduction in POL prices by the government. Under the rules, the OMCs are supposed to provide the POL products at any cost to the consumers as when the prices are on the rise, OMCs mop up the huge profits and when the prices tumble in the international market they are bound to provide the POL products at lower prices to the consumers. We have got the FIRs registered against many OMCs and now the ball is in the court of Ogra to take stern action against the unscrupulous OMCs responsible for hoarding the POL products and not maintaining the stocks for 21 days,” spokesman of the Petroleum Division Qazi Sajid confirmed to The News.

Energy Minister Omar Ayub Khan and Secretary Petroleum Mian Asad Hayaud Din will today (Monday) submit a reply with Peshawar High Court (PHC) about the POL products availability status.

DG Oil Dr Shaf-ur-Rehman Afridi when contacted said the POL crisis has subsided by 70 percent meaning that 30 percent of the country is still deprived of the supply of petroleum products. In some areas of KPK such as Swat, Malakand, Dir and Bajhore, the crisis is still there which in the days to vanish. In some areas of Punjab such as Faisalabad, DG Khan, Machhikay, Sargodha crisis is very much there. Situation in Lahore with regard to POL supply has improved. However the situation in Sindh is better than Punjab and KPK. He said that PSO’s petrol share in the market stood at 35 percent has increased to 55 percent and diesel share which was at 40 percent has swelled to 60 percent. However, the share of petrol of HSECOL was at 9 percent, but the said OMC has reduced its share to 3 percent to scale down the inventory losses.

Likewise the share of Shell’s petrol in the Pakistan’s market was at 10 percent which it has tumbled to 6 percent. And the share of TOTAL’s petrol product in the market stood at 13 percent. TOTAL has now reduced its share to 8 percent by not bringing the POL products in the market.

Similarly the share of GO that was at 10 percent has gone to 5-6 percent. However DG oil said he is not certain about how much the APL (Attock Petroleum Limited) has reduced its share in the market.

In the wake of OMCs’ obduracy, PSO braved the huge burden of losses alone which should have been shared by private OMCs. However, in the wake of effective crackdowns followed by FIRs against the unscrupulous OMCs, the POL supply across the country has improved by 70 percent. However DG Oil posed a question saying that there are many OMCs which have no infrastructure to store oil stock for 21 days but they are given the silences by Ogra.

When asked as to why not the Petroleum Division turn up in ECC meeting held on May 30 with action strategy against hoarding of POL products when it pitched the summary in ECC asking for no reduction in POL prices arguing if the prices are reduced then there will be POL supply crisis in the country, DG Oil did not come up with satisfactory question. He said that the summary was pitched in ECC based on the inputs from the OMCs.

Asked if Petroleum Division has played the role of post office and forwarded the view point of OMCs in ECC warning if POL prices are reduced, then there will be POL availability crisis, DG Oil said that Petroleum Division had also applied its mind on the summary. However, when asked if the Petroleum Division knew that there would be an artificial POL crisis then why it has not started taking action from June 1 against the OMCs, he could not come up with a substantial answer.