OTCA says it is not possible to operate at current freight rates, there is a serious risk of financial losses
Oil tankers are seen parked, following the protest by the All Pakistan Oil Tankers Owners Association, demanding the hike in fares, expansion of quota in onshore white pipeline transportation and permit to use old vehicles, in Karachi on September 19, 2023. Photo: Reuters
ISLAMABAD:
Oil Tanker Contractors Association (OTCA) on Friday threatened to halt operations and launch protests after a sharp increase in petroleum prices, warning of potential supply disruptions across parts of the country, according to an official statement.
The government on Thursday further increased petrol prices by Rs137 per litre to a record-high of Rs458.4, after Prime Minister Shehbaz Sharif decided to impose more taxes on consumers.
The Rs458.4 per litre new price of petrol is also far higher than the increase in the international market, as PM Shehbaz decided to increase the petroleum levy to a record Rs160.61 per litre on petrol. With one stroke of a pen, the premier increased the petroleum levy on petrol from Rs106 to Rs161 per litre — an increase of Rs55 in taxes.
It was the second major increase in the fuel prices in less than a month after PM Shehbaz increased the diesel and petrol prices by Rs55 per litre last month. The cumulative increase in the petrol price within a month stands at 63%, and that of the high-speed diesel at 75%.
OTCA President Abdullah Afridi said that diesel prices rose by Rs184–185. “No oil tanker will be loaded tomorrow,” he stated.
He also announced protests against oil marketing companies (OMCs) and demanded an increase in freight rates. “It is not possible to operate at current rates; there is a serious risk of financial losses,” Afridi said.
He further warned that fuel supply could be affected in Khyber-Pakhtunkhwa, Punjab and other areas. “It is better to keep the vehicles parked than incur losses,” he added.
Afridi criticised OMCs and the authorities, saying the situation amounts to “oppression and injustice”. He said, “We have been in contact with the authorities for a week, but no positive progress has been made”.
He said that Petroleum Minister Ali Pervaiz Malik had been contacted multiple times, and letters had been sent requesting negotiations. He also said that changes in pipeline quota were also affecting tanker owners, adding, “Until freight rates are increased, tankers will not operate.”
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Afridi warned of a nationwide strike and protests if their demands are not met, and appealed to tanker owners to keep their vehicles off the roads and take part in the protests.
The government increased the prices after it failed to convince the International Monetary Fund (IMF) to allow it to give more subsidies. The IMF capped the maximum subsidies on fuel at Rs152 billion.
The failure to convince the IMF also underscores that PM Shehbaz remained unable to leverage his relations with US President Donald Trump in convincing the IMF to allow the country to absorb the price shock.
