Pak oil authority warns of looming petrol and diesel shortage

 Amid a growing shortage of oil across the world due to the Russia-Ukraine war, the Oil & Gas Regulatory Authority (OGRA) on Monday warned that Pakistan may witness a petrol and diesel shortage.

Oil Companies Advisory Council (OCAC) informed OGRA about the looming shortage in the coming days, in a letter, due to inadequate imports and limited local availability, reported Geo News, citing The News International

The OCAC said that motor spirit/petrol and petrol and high-speed diesel (HSD) imports were finalized after extensive deliberation and allowed to oil marketing companies (OMCs) in line with their demand in product availability review of products for the month of November 2022.

Under product review, the deficit of 210,000 MT of HSD and 147,000 MT of petrol was worked out. It was highlighted in the meeting that HSD imports in November might be challenging owing to limited availability in the international market and very high premiums; hence so far, only PSO has booked shipments of 220,000 MT & 10,000 MT by Flow Petroleum, reported Geo News.

However, it is alarming to note that petrol import corresponding to the anticipated sales volume and the stock cover has also not been booked. The import plan should have been finalized by the importers but, so far, there is a deficit in the import plan, the OCAC letter said.

This critical issue was also highlighted in the meeting held on November 1 with the industry representatives; however, it said no firm commitments have been received from the importing OMCs in writing, reported Geo News.

Amid surging energy prices worldwide due to the Russia-Ukraine war and the deteriorating economy due to inflation and its depreciating currency, Pakistan is forced to spend 66 per cent of its forex reserve on fuel imports.

Pakistan is currently spending approximately USD 21.43 billion annually on fuel imports, which is about 66 per cent of its total foreign exchange reserves, reported The Express Tribune.

Pakistan's reliance on costly imported fuels continues to grow in parallel with the increasing energy needs causing stagnation in the sector.