Advises public not to pay attention to rumours as petroleum supply situation in country remains stable
People wait their turn to get fuel at a petrol station, in Karachi, Pakistan June 2, 2022. Picture taken June 2, 2022. PHOTO: REUTERS
The federal government on Thursday ordered all provinces to instruct deputy commissioners (DCs) to carry out inspections within their respective jurisdictions to monitor the illegal hoarding of petroleum products for profiteering, as tensions in the Middle East continue to escalate.
The statement came in the wake of reports citing a petroleum shortage in the country. Leaders of the Pakistan Petroleum Dealers Association (PPDA) raised the alarm, alleging that petroleum companies have reduced supply and warned that petrol pumps may begin shutting down within the next few days if the supply is not restored.
Central Punjab President Nauman Majeed said that petrol supply has also been reduced by 50%. He alleged that some private companies had begun hoarding petroleum products.
A statement issued by the Oil and Gas Regulatory Authority (OGRA) highlighted concerns over possible hoarding attempts, with reports suggesting that some elements may exploit the current situation to profit from the shortage of fuel.
“To curb such practices, all Provincial Chief Secretaries have been requested to direct the Deputy Commissioners (DCs) to carry out inspections within their respective jurisdictions. Any premises found involved in illegal storage of petroleum products will be sealed, and action will be taken in accordance with the law,” OGRA said.
Meanwhile, OGRA’s teams are actively monitoring the situation on the ground. Inspections are being carried out at oil depots and retail outlets to ensure the smooth supply of petroleum products and to prevent malpractice.
“The public is advised not to pay attention to rumours and to continue normal consumption patterns, as the petroleum supply situation in the country remains stable,” the statement added.
The government has reassured citizens that the country holds sufficient stocks of petroleum products to meet national demand, and there is no need for panic buying or hoarding.
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“In view of the prevailing geopolitical situation, authorities are closely monitoring the petroleum supply chain to ensure the uninterrupted availability of products across the country. The existing stock position remains comfortable and well within the prescribed requirements,” OGRA said.
The authority also emphasised that strict action would be taken against any individual or entity found involved in illegal hoarding or storage of petroleum products at unauthorised locations, particularly at places other than licensed oil depots and retail outlets of Oil Marketing Companies (OMCs).
Oil for 28 days
The Oil and Gas Regulatory Authority has already clarified that they have high stocks of oil to meet 28 days of consumption requirement of the country, following pre-emptive measures to import surplus fuel.
Owing to the US-Israel attack on Iran, however, two cargoes of crude oil have been stuck after the closure of the Strait of Hormuz. This channel is 21 miles (33 km) wide and a fifth of the world’s oil passes through it.
The Strait of Hormuz was used to ship an average of 20 million barrels of crude, condensate and fuel per day last year. OPEC members like Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq depend on this shipping lane to export most of their crude, mainly to Asia. “We have ample stocks of petrol and diesel to meet the country’s requirement,” officials said, adding that the country could meet the fuel needs of consumers for 28 days.
However, the government has planned to import oil through the Red Sea from Saudi Arabia and the United Arab Emirates (UAE) due to the closure of the Strait of Hormuz, while also shifting to a weekly oil price review mechanism.
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Sources told The Express Tribune that the government is currently working on various measures to ensure uninterrupted oil supply amid the US-Israel-Iran war.
Pakistan imports around one million barrels of oil on a monthly basis, with Saudi Arabia being a key oil exporter to the country. The UAE also exports oil to Pakistan.
Sources said that UAE-based firm ADNOC and Saudi Aramco will supply oil to Pakistan by bypassing the Strait of Hormuz. One refinery has already imported a few shipments through the Red Sea. A couple of oil vessels have reached Pakistan, while others are en route.
As another measure, the government plans to shift the oil price review from the existing fortnightly system to a weekly basis. The objective is to discourage hoarding of petroleum products by dealers.
Sources said the government had projected a possible increase of Rs50 per litre in oil prices following the recent war in the Gulf region.
