Petrol shortages: Amid gruelling crisis, PM suspends officials

Rationing, conspiracy theories abound at petrol stations in Punjab

BAHAWALPUR/ FAISALABAD/ RAWALPINDI/ ISLAMABAD/ LAHORE/ KARACHI:

As the acute shortage of petrol in many parts of the country continues to cripple the economy, Prime Minister Nawaz Sharif on Saturday suspended four senior government officials, including some who had consistently been warning the government in advance of the impending crisis.

Petroleum Secretary Abid Saeed, Additional Secretary Mohammad Naeem Malik, Director General Oil Muhammad Azam and Pakistan State Oil’s Managing Director Amjad Parvez Janjua have been suspended from their duties.

The news of the suspension was confirmed by officials at the petroleum ministry, the Prime Minister’s Secretariat and PSO, though Petroleum Minister Shahid Khaqan Abbasi said he was not aware of any suspensions. “I heard it on the television. It’s a holiday for government officers so I can’t confirm this,” said Abbasi.

The prime minister reportedly made the move immediately upon his return from Saudi Arabia, though it is unclear how the country’s largest oil company, PSO, is now expected to navigate through the worst of the crisis while its MD has been suspended.

Janjua had been consistently warning the government of the imminent nature of the crisis and seeking financial assistance from the finance ministry, but was rebuffed on many occasions. He wrote a letter to the petroleum secretary on December 24 warning of “an imminent supply chain breakdown”, followed up by another one on December 30. Not only were those letters ignored, but they also did not prevent his name from being included among the government decided to punish for the current situation.

The move to suspend the officials followed days of bad publicity for the government in the shape of continued news coverage of the petrol shortage, which left thousands stranded in bitter cold on the streets of urban Punjab, the heart of the prime minister’s political power base. “This was expected,” said one oil industry source who declined to be identified. “Someone had to pay, but this has apparently been done to save the face. The real issues of inefficiencies, weak policy framework and incompetence remain.”

The crisis has pitted the oil industry against the government, and even opened up rifts within the Nawaz administration. At a press conference about terrorism policy on Saturday, Interior Minister Chaudhry Nisar Ali Khan, a close confidante of the prime minister, accepted that government incompetence was to blame for the petrol shortages. While Nisar blamed the oil companies as well, he indicated the government would hold an investigation into the crisis once the prime minister arrived in Islamabad.

PSO officials, meanwhile, scrambled to try to improve the supply situation in Punjab, dispatching trucks on Saturday that are expected to arrive in Lahore, Faisalabad and South Punjab on Sunday. An estimated 1.2 million litres a day is being sent to Lahore, 0.8 million to Faisalabad and 1.8 million for all of South Punjab.

PSO officials, however, are hampered in their efforts by the fact that they are legally required to use the inefficient state-owned Pakistan National Shipping Corporation (PNSC) for all oil imports. Several shipments that were scheduled to arrive via PNSC-owned ships have been between seven and 10 days late. Officials at PSO continue to insist that it was the sudden surge in demand caused by a sharp price decline that precipitated the crisis. Prices have declined 27% from their peak in June 2014, leading to a 26% increase in demand in January compared to the same month last year, say PSO officials, though this is an excuse that not everyone buys as valid.

“If you ask me, it’s purely mismanagement. They failed to foresee the demand and supply scenario,” said Kalim A Siddiqui, a former managing director of PSO.

Meanwhile, the petrol shortage continued to play out on the streets of Punjab. People responded to the crisis with a mix of impromptu rationing as well as trading conspiracy theories about the reasons behind the crisis while they waited in line at petrol pumps.

Some petrol stations in Faisalabad were rationing petrol at a rate of one litre for every motorcycle and five litres for every car to help evenly spread the pain of the shortages. In Lahore, some petrol pumps were reportedly engaged in a similar rationing policy: Rs100 worth of petrol for motorcycles, and Rs500 for cars.

Nearly every PSO petrol pump in Punjab, more than two thirds of the total, continued to remain closed on Saturday, while the only pumps that remained open were ones owned by private companies such as Shell, Chevron, Hascol Petroleum, etc.

Some people took to selling oil at higher prices than the government-mandated Rs78.28 per litre. In some parts of Rawalpindi, some pumps were selling petrol at Rs90 per litre. In parts of Bahawalpur, it was as high as Rs250 per litre at some shops. As commuters wait in line for hours to get petrol, some trade conspiracy theories about the reasons behind the shortages. Abdul Kareem, a commuter in Faisalabad, spun a tale of how he thinks the Sharif family are personally benefiting from the crisis.

Others had a more cynical view. Shahid Bhatti, a commuter in Rawalpindi, said: “In this so-called nuclear power, we can only expect miseries and disappointment from our incompetent and dishonest rulers.”


Published in The Express Tribune, January 18^th, 2015.