Minister promises action to address diesel crisis
Petroleum Minister Musadik Malik has expressed ignorance about excessive diesel imports by a few oil marketing companies (OMCs), which put operations of local refineries in jeopardy.
The Oil Companies Advisory Council (OCAC), which represents the refineries and exploration companies, has recently raised the issue of swelling diesel stocks, which jumped to 49 days of consumption.
It blamed the situation on the permission for diesel imports in bulk by the Oil and Gas Regulatory Authority (Ogra) to a few OMCs, resulting in reduced demand for the products produced by the refineries.
When asked by journalists at a press briefing on Wednesday, Petroleum Minister Musadik Malik expressed his ignorance about the diesel crisis. "I will discuss it with Ogra and action will be taken against those involved in this crisis," he remarked.
Meanwhile, Ogra spokesperson in a statement said that a meeting was held on Wednesday with the representatives of refineries and OMCs to discuss and adopt a strategy to address the challenges related to accumulating stocks of diesel at the refineries. He said that September cargoes of OMCs had been deferred and the three cargoes booked for October would be rationalised/cancelled. "December cargoes shall also be cancelled (if required) in due course of time."
Gas crisis in winter
Responding to a question about the threat of gas shortage in winter, the petroleum minister said that Pakistan was importing 1,000 million cubic feet per day (mmcfd) of liquefied natural gas (LNG). Therefore, "there will not be any gas scarcity in the winter season."
The country may require a single cargo of LNG on a spot basis, he said, adding that the cost of indigenous gas was Rs1,380 per million British thermal units (mmBtu) and if it was blended with LNG, the cost would go up to Rs1,600 per mmBtu.
He ruled out any plans to further increase consumer gas prices. While discussing the weighted average cost of gas, he called the proposal similar to the "Kalabagh" problem. The previous Pakistan Tehreek-e-Insaf (PTI) government had got approved an Act from parliament for the weighted average cost of gas. But the federal government did not fully implement it due to the opposition from provinces.
IP gas pipeline
Replying to a query about the progress on Iran-Pakistan gas pipeline project, the minister refused to share details without consulting the attorney general of Pakistan.
However, he dismissed the talk of a potential penalty of $18 billion in case Pakistan did not execute the project. Sources said that the minister was reluctant to share details because the Foreign Office had barred him from giving any statement on the IP pipeline project, which could annoy Iran's arch-rival the United States.
Setting up new refineries
Musadik Malik said that the government was working on attracting billions of dollars in investment from Saudi Arabia for setting up an oil refinery in Pakistan.
He revealed that the government had held talks with industrialists, even from China, keeping in view the electric vehicle boom in the neighbouring country. The minister said that the government had commissioned a report on setting up a greenfield refinery, which would be completed in December. The refinery will comprise 50% petrochemical plants keeping in view the growing demand for electric vehicles.
After finalising the report, the government will expedite work on the new refinery and it is already working with all investors to attract investment.
Speaking about the Reko Diq copper and gold mining project, the minister said that the government was in talks with Saudi Arabia as well as financiers to attract investment.
"The Reko Diq project is an asset for Pakistan and it is at an advanced stage," he remarked.