Petrol shortage to go on for another 10 days: Ministry
OGRA, petroleum ministry blame each other for the crisis.
ISLAMABAD:
The ongoing shortage of petroleum in the northern parts of the country is expected to continue for another ten days, according to senior petroleum ministry officials.
Testifying before the parliamentary public accounts committee (PAC), Petroleum Secretary Ijaz Chaudhry said “the situation will continue for another ten days,” adding that complete normalisation of petrol supplies would not be possible before July.
Chaudhry’s statement directly contradicts that of his boss, Petroleum Minister Asim Hussain, who said that the crisis would be over in a couple of days. For the last several days, there has been an acute shortage of petroleum in Punjab, Khyber-Pakhtunkhwa and Azad Jammu Kashmir.
The petroleum secretary clarified that the crisis could have been averted much earlier, had the government allowed imports of 25,000 metric tonnes of oil from India. Oil imports from India are banned under current law.
Meanwhile, even as PAC members grilled ministry officials and regulators on the causes of the crisis, petroleum ministry officials blamed the Oil & Gas Regulatory Authority (Ogra) for failing to ensure that oil marketing companies had adequate stocks. Ogra vehemently refused to accept that they were responsible, with official saying “monitoring oil stocks in not Ogra’s responsibility.”
The root of the problem, as with nearly all of the energy sector’s woes over the last three years, appears to be the inter-corporate circular debt that has crippled financial liquidity in the entire sector. Chaudhry said that oil company claim that they cannot store large stocks since they lack cash, owing to the crisis caused by the circular debt. The companies include Admore Pakistan, HASCOL, ASKAR, OTCL, and Chevron Pakistan.
Chaudhry said that the energy sector’s circular debt has crossed Rs 338 billion. Despite the government’s injection of Rs120 billion into the system, receivables at Pakistan State Oil (PSO) stood at Rs135 billion, and the Oil and Gas Development Company’s (OGDC) at Rs102 billion.
Ogra officials said that while the government had issued notices to the oil companies for their low levels of inventories, they had not been threatened with a suspension of their licenses. Their inability to maintain adequate stocks was due to the government’s inability to pay price differential claims on time and the overall circular debt levels.
While the PAC blamed both Ogra and the petroleum ministry, it ultimately held Ogra responsible for the crisis. “Ogra and the petroleum ministry are desensitised to the people’s problems and Ogra’s negligence has caused the crisis,” ruled the PAC.
The PAC gave a two-day deadline to both of them to submit separate reports on the causes of the crisis. “Someone has to be held responsible for the mess,” observed the PAC.
The PAC also grilled the petroleum secretary for presenting what it termed to be a ‘half-baked’ inquiry report on the case of Rs158 million worth of oil that was supplied to a private contractor by the state-owned PSO without obtaining collateral.
“If meaningless reports are presented in the future, the PAC would take serious action against the secretary,” warned the acting PAC chair Yasmeen Rehman.
Published in The Express Tribune, June 16th, 2011.
The ongoing shortage of petroleum in the northern parts of the country is expected to continue for another ten days, according to senior petroleum ministry officials.
Testifying before the parliamentary public accounts committee (PAC), Petroleum Secretary Ijaz Chaudhry said “the situation will continue for another ten days,” adding that complete normalisation of petrol supplies would not be possible before July.
Chaudhry’s statement directly contradicts that of his boss, Petroleum Minister Asim Hussain, who said that the crisis would be over in a couple of days. For the last several days, there has been an acute shortage of petroleum in Punjab, Khyber-Pakhtunkhwa and Azad Jammu Kashmir.
The petroleum secretary clarified that the crisis could have been averted much earlier, had the government allowed imports of 25,000 metric tonnes of oil from India. Oil imports from India are banned under current law.
Meanwhile, even as PAC members grilled ministry officials and regulators on the causes of the crisis, petroleum ministry officials blamed the Oil & Gas Regulatory Authority (Ogra) for failing to ensure that oil marketing companies had adequate stocks. Ogra vehemently refused to accept that they were responsible, with official saying “monitoring oil stocks in not Ogra’s responsibility.”
The root of the problem, as with nearly all of the energy sector’s woes over the last three years, appears to be the inter-corporate circular debt that has crippled financial liquidity in the entire sector. Chaudhry said that oil company claim that they cannot store large stocks since they lack cash, owing to the crisis caused by the circular debt. The companies include Admore Pakistan, HASCOL, ASKAR, OTCL, and Chevron Pakistan.
Chaudhry said that the energy sector’s circular debt has crossed Rs 338 billion. Despite the government’s injection of Rs120 billion into the system, receivables at Pakistan State Oil (PSO) stood at Rs135 billion, and the Oil and Gas Development Company’s (OGDC) at Rs102 billion.
Ogra officials said that while the government had issued notices to the oil companies for their low levels of inventories, they had not been threatened with a suspension of their licenses. Their inability to maintain adequate stocks was due to the government’s inability to pay price differential claims on time and the overall circular debt levels.
While the PAC blamed both Ogra and the petroleum ministry, it ultimately held Ogra responsible for the crisis. “Ogra and the petroleum ministry are desensitised to the people’s problems and Ogra’s negligence has caused the crisis,” ruled the PAC.
The PAC gave a two-day deadline to both of them to submit separate reports on the causes of the crisis. “Someone has to be held responsible for the mess,” observed the PAC.
The PAC also grilled the petroleum secretary for presenting what it termed to be a ‘half-baked’ inquiry report on the case of Rs158 million worth of oil that was supplied to a private contractor by the state-owned PSO without obtaining collateral.
“If meaningless reports are presented in the future, the PAC would take serious action against the secretary,” warned the acting PAC chair Yasmeen Rehman.
Published in The Express Tribune, June 16th, 2011.