Govt launches inquiry into oil crisis
Forms committee to probe alleged involvement of OMCs in hoarding, black marketing
PHOTO: AFP
ISLAMABAD:
The government has initiated an inquiry against oil marketing companies (OMCs) for their alleged involvement in the current oil crisis and has constituted a committee headed by a representative of the Federal Investigation Agency (FIA).
FIA’s DG Oil will head the committee, which will comprise representatives of the local administration and Pakistan State Oil (PSO).
These officials will look into elements of alleged hoarding and black marketing of petroleum products by the OMCs. They will also verify the availability of stocks at depots of OMCs and their supply to retail outlets.
Meanwhile, the Oil Companies Advisory Council (OCAC) said in a statement that the current stock of petrol was continuously being replenished by the OMCs from supplies being made through local refineries’ production and regular arrival of vessels carrying imported petrol at the two ports - Karachi Port Trust (KPT) and Port Qasim.
The OCAC is an independent organisation formed by the refineries, OMCs and a pipeline company. It represents the downstream oil industry at various government and non-government forums. It may be noted that in June around 850,000 tons of petrol is being supplied from production by local refineries as well as from imports to the distribution and retail network across the country. Current sales of petrol are exceptionally high (50% growth) due to the easing of Covid-19 lockdown in the past few weeks (causing depletion of stocks) and low price of the product.
This sudden increase of 50% in consumption is being met by the industry through additional imports in June and July. “While there are a few pockets of constrained supplies in some parts of the country, the Ministry of Energy (Petroleum Division) (MEPD), Oil and Gas Regulatory Authority (Ogra), local refineries and OMCs are working round the clock to mitigate the situation,” the OCAC said in its statement.
In order to address the issues following the scarcity of petroleum products, the Petroleum Division held a video conference on Monday, chaired by Minister for Energy Omar Ayub Khan. Other stakeholders such as Ogra and OMCs participated in the video conference to address demand and supply challenges.
The minister expressed deep concern over the petrol crisis across the country due to artificial shortage caused by some OMCs and/or their dealers for profit maximisation that resulted in shortages/dryouts and adversely impacted the general public.
The meeting decided to form a committee to verify stock availability and identify black marketing and hoarding by the OMCs. It concluded that the government would take strict action against the dealers involved in overcharging and hoarding.
Refineries were directed to produce the committed volume of petroleum products while OMCs would not be allowed to cancel or defer planned cargoes for June 2020.
The meeting also decided to move OMCs from ports in Karachi to main consumption centres immediately. In this regard, a committee has also been constituted to inspect OMCs’ installations/depots to verify their stocks physically.
Moreover, it was stressed that additional production by the refineries as well as planned imports should be on schedule to meet monthly needs. As of June 7, 2020, 214,536 tons of stock was available in the country, which covered 10 days of requirement.
Published in The Express Tribune, June 9th, 2020.
The government has initiated an inquiry against oil marketing companies (OMCs) for their alleged involvement in the current oil crisis and has constituted a committee headed by a representative of the Federal Investigation Agency (FIA).
FIA’s DG Oil will head the committee, which will comprise representatives of the local administration and Pakistan State Oil (PSO).
These officials will look into elements of alleged hoarding and black marketing of petroleum products by the OMCs. They will also verify the availability of stocks at depots of OMCs and their supply to retail outlets.
Meanwhile, the Oil Companies Advisory Council (OCAC) said in a statement that the current stock of petrol was continuously being replenished by the OMCs from supplies being made through local refineries’ production and regular arrival of vessels carrying imported petrol at the two ports - Karachi Port Trust (KPT) and Port Qasim.
The OCAC is an independent organisation formed by the refineries, OMCs and a pipeline company. It represents the downstream oil industry at various government and non-government forums. It may be noted that in June around 850,000 tons of petrol is being supplied from production by local refineries as well as from imports to the distribution and retail network across the country. Current sales of petrol are exceptionally high (50% growth) due to the easing of Covid-19 lockdown in the past few weeks (causing depletion of stocks) and low price of the product.
This sudden increase of 50% in consumption is being met by the industry through additional imports in June and July. “While there are a few pockets of constrained supplies in some parts of the country, the Ministry of Energy (Petroleum Division) (MEPD), Oil and Gas Regulatory Authority (Ogra), local refineries and OMCs are working round the clock to mitigate the situation,” the OCAC said in its statement.
In order to address the issues following the scarcity of petroleum products, the Petroleum Division held a video conference on Monday, chaired by Minister for Energy Omar Ayub Khan. Other stakeholders such as Ogra and OMCs participated in the video conference to address demand and supply challenges.
The minister expressed deep concern over the petrol crisis across the country due to artificial shortage caused by some OMCs and/or their dealers for profit maximisation that resulted in shortages/dryouts and adversely impacted the general public.
The meeting decided to form a committee to verify stock availability and identify black marketing and hoarding by the OMCs. It concluded that the government would take strict action against the dealers involved in overcharging and hoarding.
Refineries were directed to produce the committed volume of petroleum products while OMCs would not be allowed to cancel or defer planned cargoes for June 2020.
The meeting also decided to move OMCs from ports in Karachi to main consumption centres immediately. In this regard, a committee has also been constituted to inspect OMCs’ installations/depots to verify their stocks physically.
Moreover, it was stressed that additional production by the refineries as well as planned imports should be on schedule to meet monthly needs. As of June 7, 2020, 214,536 tons of stock was available in the country, which covered 10 days of requirement.
Published in The Express Tribune, June 9th, 2020.