Thursday June 30, 2022

Petroleum products supply to be ensured during holidays

May 03, 2022

KARACHI: Government has put the oil supply related departments on alert to monitor the supply of petroleum products during the Eid holidays.

“The prevailing situation in oil supply chain requires that regular monitoring is continued in consultation with relevant stakeholders during Eid holidays,” read a notification of the Ministry of Energy that also directed all the staff of Directorate General Oil of Petroleum Division to remain alert and contactable during the Eid holidays.

According to sources in the oil industry, the government’s step to monitor the supply of oil during Eid holidays was in the backdrop of diesel shortage in parts of Punjab. However, during Eid holidays, heavy vehicles consuming diesel would not be operating, which reduces the likelihood of any acute shortage.

Though sources pointed out that immediately after Eid holidays, the consumption of diesel would surge when cargo transport and public transport would start their movement across the country.

Sources said that during Eid holidays, petrol consumption usually goes up when people go out of homes to meet relatives and friends as well as visit recreational spots. Pakistan was currently passing through difficult times to ensure diesel and petrol supply to domestic consumers by giving huge subsidy to keep prices lower. Government would pay almost Rs30/litre subsidy on petrol and Rs73/litre subsidy on diesel till May 15, 2022 for freezing the price of petrol at Rs149.86/litre and diesel at Rs144.15/litre.

According to the sources in the oil industry, diesel was the main problem because of its high prices in the global market. Usually there is a difference of $10-12 between the prices of crude oil and diesel in the international market. However, now the margin has widened to $40 because of diesel shortage in the international market, which is making the diesel import of Pakistan costlier.

Sources said that the diesel produced in Middle East was now being exported to Europe after Russia supplies slumped following the invasion of Ukraine. Sources quoting the international media said that diesel export from Gulf region to Europe in April surged the highest level since October 2020. “Europe has money and can buy the expensive diesel to keep the wheel of its economy,” sources said, and added that this situation has pushed countries like dollar-starved Pakistan to buy the oil products especially diesel at the highest price for domestic needs.