Depleting reserves: Petrol stocks fall to just nine days of needs

Oil minister, however, says one cargo ship has arrived, another is on its way

ISLAMABAD: The stock of oil in the country has plunged again, sparking jitters among economic managers and reminding of the acute petrol shortage that struck the country, particularly Punjab, in January 2015.

Despite facing such a crisis earlier, which led to the suspension of top officials of Pakistan State Oil as well as the petroleum secretary, the stock of petrol has again dropped. This shows that the government has failed to frame a strategy for keeping strategic reserves.



The Economic Coordination Committee (ECC) of the cabinet, in a meeting on September 23, noted that the country had petrol stocks for only nine days of requirement and described them as too low, say officials.

This was contrary to the licensing condition for oil marketing companies, which bound them to keep oil stocks for at least 20 days.

Meeting participants told the ECC that stocks of petroleum products averaged 14 days on September 21, causing serious concern among the economic managers. However, petrol reserves had dropped to such levels that they could meet only nine days of needs.

The additional secretary of Ministry of Petroleum revealed that one cargo ship carrying petrol had docked at the port and another ship was on its way. With the addition of these cargoes, the stock of petrol would rise up to 14 days of requirement.

Water and Power Secretary Younus Dagha pointed out that the current chart of stock position only showed the available stocks and it did not reflect the demand level. He suggested that a new column displaying the actual demand of commodities should be added to the chart.

The ECC was informed that the sales tax received from oil products stood much lower than that collected in 2013. An official claimed that the government was passing full benefit of the fall in international petroleum prices on to consumers of the country.



It was noted that electricity and gas production had increased significantly in 2015-16 compared to the previous year, which not only narrowed the gap between demand and supply but also helped to reduce power outages from 16 hours to six-eight hours per day.

It was suggested that a new column showing the actual demand and supply of electricity could be added to the current format.

The ECC directed the Ministry of Water and Power to brief it on the energy position every month.

The meeting participants highlighted that the sharp decline in global crude prices had led to a fall in Pakistan’s exports to oil-dependent economies.

Consequently, the production of large-scale manufacturing industry grew at a slower pace at 3.2% in July-June 2015-16 compared to 3.4% in the previous year. The goods whose shipments dropped were wood products, engineering products, iron and steel products, petroleum products, electronics, paper and board.

Published in The Express Tribune, September 30^th, 2016.

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