Pakistan’s slippery slope as oil shortage fears come alive
Oil tankers’ association has put forward its list of demands; since 2009, OGRA looking to implement safety measures
Photo: FIle
KARACHI:
Pakistan’s will and ability to enforce regulation came under the scanner, as oil transporters drafted a ‘list of demands’ after talks to end the strike failed to yield a result on Tuesday.
The strike, which began on Monday and has caused immense hardship to consumers already, began when the Oil and Gas Regulatory Authority (OGRA) directed oil transporters to meet the safety and quality guidelines introduced in 2009. The regulator maintained that eight years is ample time to meet the requirements.
The National Highway Authority (NHA) is also among the authorities implementing the regulations as it checks safety standards in oil tankers transporting the flammable commodity from Karachi’s ports.
The enforcement gathered pace after an oil tanker toppled in Punjab, and led to the deaths of over 200 people. Oil marketing company Shell Pakistan Limited has already paid Rs258 million on account of fine and compensation for the deceased and injured following the incident in Ahmedpur Sharqia.
However, when it came to enforcing safety guidelines so that such incidents do not occur, it seems like the regulator is facing a difficult time.
Straightaway, oil transporters announced that they will suspend supplies, the effect of which was felt more profoundly on Tuesday as inventory at fuel stations ran out.
Long queues were seen in the early half of the day, with many stations also reportedly shutting down due to fuel shortage.
The strike
Some 35,000-40,000 oil tankers are parked across different parts of the country, including on highways and Shireen Jinnah Colony, Karachi.
Oil Tankers Contractors Association President Babar Ismail told The Express Tribune that the meeting with Ogra chairperson ended without a conclusion.
“We left the meeting in the middle after the Ogra chairperson said she wanted to talk to oil marketing companies - PSO, Shell, and Hascol - instead of owners of oil tankers.”
The meeting was called by the Ministry of Petroleum and Natural Resources secretary in a bid to have meaningful dialogue that would hopefully result in calling off the strike. Stakeholders included Ogra, the NHA, oil marketing companies and oil tanker owners’ representative bodies.
“The Ogra chairperson was of the view that oil marketing companies were responsible for ensuring implementation of the regulations,” Ismail said. An official at Ogra said the companies wanted five years to implement the regulations. However, eight years on, the situation on ground has not changed.
Regulations
One of the safety requirements is for oil tankers to have four axles, it was learnt. Axles support the vehicle’s body weight and add stability.
In response, however, Oil Tankers Contractors Association Senior Vice Chairman Shams Shahwani said that the body has presented an 11-point set of conditions to call-off the strike.
The conditions include 70% upward revision in freight charges, the regulation demanding three- and four-axle vehicles should be suspended, and NLC services in oil transportation should be suspended, according to the statement.
The association has summoned an emergency meeting in Islamabad in the wee hours on Wednesday to look into the situation.
Fuel stations
Pakistan Petroleum Dealers Association Chairman Abdul Sami Khan said the impact of the strike was huge in big cities like Karachi. “Close to two-thirds of the petrol pumps have been shut down in Karachi,” he claimed. Other cities are reporting a 50% closure.
Khan, who is also chairman of the CNG Dealers Association, said they have suggested providing gas to CNG fuelling stations on Wednesday, which is otherwise a scheduled off-day.
“This was suggested to scale down a transportation crisis on the roads. The authorities, however, have maintained silence,” he said.
Ogra’s point of view
Ogra spokesman Imran Ghaznavi said oil tankers are demanding suspension of the Ogra 2009 safety regulations.
“We cannot do this,” said Ghaznavi. “We cannot compromise on safety standards. Who will be held responsible in cases such as the Ahmedpur Sharqia one?
“Would they [oil tankers’ owners/association) accept responsibility? We can only sit together and find a way forward,” he said.
He said oil marketing companies are responsible for ensuring implementation of its 2009 safety regulations on oil tankers. However, eight years down the road, regulations remained unimplemented.
Ghaznavi hoped the issue will get resolved on Wednesday. Everyone is trying to convince oil transporters to call off the strike. “A follow-up meeting may take place among stakeholders on Wednesday,” he said.
OMCs’ version
Meanwhile, PSO said in a reply that the state-owned oil marketing company has introduced ADR Scheme for tank lorries in the year 2002. The company stated that ADR standards also cover Ogra/NHA Rules. Workshops were identified and the Cartage Contractors were bound to upgrade/modify the tank Lorries from the identified workshops only.
“Cartage Contractors have shown resentment through strikes and adopted delaying tactics on the matter.”
Airlines’ operations
On the other hand, Pakistan International Airlines (PIA) and private airlines’ spokespersons said the postponement and cancellation of domestic and international flights has nothing to do with the strike.
PSO and Shell supply jet fuels via pipelines. Besides, they maintain a two-to-three-day reserve at each airport, they added. The national carrier and private airlines postponed and cancelled over two dozen flights on Tuesday. However, this occurred due to shortage of aircraft with the beginning of Hajj operations, they added.
Recent strikes
This is not the first time a strike call has been made by oil tankers.
Earlier, they observed a strike when the government imposed 16% sales tax on their earnings in April 2017. The levy had been pending for months already.
The government, however, assured oil tankers that it would withdraw the tax after which the strike was called off. In mid-May, cargo transporters went on strike after the Sindh High Court barred them from operating on Karachi’s roads following an accident in the city.
Published in The Express Tribune, July 26th, 2017.
Pakistan’s will and ability to enforce regulation came under the scanner, as oil transporters drafted a ‘list of demands’ after talks to end the strike failed to yield a result on Tuesday.
The strike, which began on Monday and has caused immense hardship to consumers already, began when the Oil and Gas Regulatory Authority (OGRA) directed oil transporters to meet the safety and quality guidelines introduced in 2009. The regulator maintained that eight years is ample time to meet the requirements.
The National Highway Authority (NHA) is also among the authorities implementing the regulations as it checks safety standards in oil tankers transporting the flammable commodity from Karachi’s ports.
The enforcement gathered pace after an oil tanker toppled in Punjab, and led to the deaths of over 200 people. Oil marketing company Shell Pakistan Limited has already paid Rs258 million on account of fine and compensation for the deceased and injured following the incident in Ahmedpur Sharqia.
However, when it came to enforcing safety guidelines so that such incidents do not occur, it seems like the regulator is facing a difficult time.
Straightaway, oil transporters announced that they will suspend supplies, the effect of which was felt more profoundly on Tuesday as inventory at fuel stations ran out.
Long queues were seen in the early half of the day, with many stations also reportedly shutting down due to fuel shortage.
The strike
Some 35,000-40,000 oil tankers are parked across different parts of the country, including on highways and Shireen Jinnah Colony, Karachi.
Oil Tankers Contractors Association President Babar Ismail told The Express Tribune that the meeting with Ogra chairperson ended without a conclusion.
“We left the meeting in the middle after the Ogra chairperson said she wanted to talk to oil marketing companies - PSO, Shell, and Hascol - instead of owners of oil tankers.”
The meeting was called by the Ministry of Petroleum and Natural Resources secretary in a bid to have meaningful dialogue that would hopefully result in calling off the strike. Stakeholders included Ogra, the NHA, oil marketing companies and oil tanker owners’ representative bodies.
“The Ogra chairperson was of the view that oil marketing companies were responsible for ensuring implementation of the regulations,” Ismail said. An official at Ogra said the companies wanted five years to implement the regulations. However, eight years on, the situation on ground has not changed.
Regulations
One of the safety requirements is for oil tankers to have four axles, it was learnt. Axles support the vehicle’s body weight and add stability.
In response, however, Oil Tankers Contractors Association Senior Vice Chairman Shams Shahwani said that the body has presented an 11-point set of conditions to call-off the strike.
The conditions include 70% upward revision in freight charges, the regulation demanding three- and four-axle vehicles should be suspended, and NLC services in oil transportation should be suspended, according to the statement.
The association has summoned an emergency meeting in Islamabad in the wee hours on Wednesday to look into the situation.
Fuel stations
Pakistan Petroleum Dealers Association Chairman Abdul Sami Khan said the impact of the strike was huge in big cities like Karachi. “Close to two-thirds of the petrol pumps have been shut down in Karachi,” he claimed. Other cities are reporting a 50% closure.
Khan, who is also chairman of the CNG Dealers Association, said they have suggested providing gas to CNG fuelling stations on Wednesday, which is otherwise a scheduled off-day.
“This was suggested to scale down a transportation crisis on the roads. The authorities, however, have maintained silence,” he said.
Ogra’s point of view
Ogra spokesman Imran Ghaznavi said oil tankers are demanding suspension of the Ogra 2009 safety regulations.
“We cannot do this,” said Ghaznavi. “We cannot compromise on safety standards. Who will be held responsible in cases such as the Ahmedpur Sharqia one?
“Would they [oil tankers’ owners/association) accept responsibility? We can only sit together and find a way forward,” he said.
He said oil marketing companies are responsible for ensuring implementation of its 2009 safety regulations on oil tankers. However, eight years down the road, regulations remained unimplemented.
Ghaznavi hoped the issue will get resolved on Wednesday. Everyone is trying to convince oil transporters to call off the strike. “A follow-up meeting may take place among stakeholders on Wednesday,” he said.
OMCs’ version
Meanwhile, PSO said in a reply that the state-owned oil marketing company has introduced ADR Scheme for tank lorries in the year 2002. The company stated that ADR standards also cover Ogra/NHA Rules. Workshops were identified and the Cartage Contractors were bound to upgrade/modify the tank Lorries from the identified workshops only.
“Cartage Contractors have shown resentment through strikes and adopted delaying tactics on the matter.”
Airlines’ operations
On the other hand, Pakistan International Airlines (PIA) and private airlines’ spokespersons said the postponement and cancellation of domestic and international flights has nothing to do with the strike.
PSO and Shell supply jet fuels via pipelines. Besides, they maintain a two-to-three-day reserve at each airport, they added. The national carrier and private airlines postponed and cancelled over two dozen flights on Tuesday. However, this occurred due to shortage of aircraft with the beginning of Hajj operations, they added.
Recent strikes
This is not the first time a strike call has been made by oil tankers.
Earlier, they observed a strike when the government imposed 16% sales tax on their earnings in April 2017. The levy had been pending for months already.
The government, however, assured oil tankers that it would withdraw the tax after which the strike was called off. In mid-May, cargo transporters went on strike after the Sindh High Court barred them from operating on Karachi’s roads following an accident in the city.
Published in The Express Tribune, July 26th, 2017.