PM directs provinces to take legal action against petroleum hoarders
Prime Minister Shehbaz Sharif. Photo: File
The government has directed provincial authorities to launch strict action against hoarders of petroleum products and ensure uninterrupted fuel supply, while confirming that adequate reserves are available to meet the country’s needs, according to the Prime Minister's Office.
According to the Prime Minister's Office, officials informed a high-level meeting that Pakistan currently has sufficient stocks of petroleum products to fulfil domestic requirements despite the evolving regional situation.
The statement said authorities were instructed to take strict legal action against individuals and businesses involved in hoarding petroleum products. "Any petrol pump involved in creating artificial shortages must be immediately closed, its licence revoked, and legal proceedings initiated" it added.
The Oil and Gas Regulatory Authority (Ogra) has previously said that they have high stocks of oil to meet 28 days of consumption requirement of the country, following pre-emptive measures to import surplus fuel. However, petroleum pump owners have been sounding the alarm, alleging that petroleum companies have reduced supply and that some private companies have begun hoarding petroleum products.
Prime Minister @CMShehbaz has directed provincial governments to take strict legal action against hoarders of petroleum products@PakPMO #RadioPakistan #news https://t.co/DkKkuueX7v pic.twitter.com/JdXuN6HJ88
"They are either not providing the product or have limited it to such an extent that we hardly fulfil the need of the public, or fuel stations get dry," the All Pakistan Petrol Pump Owners Association said in a letter on Wednesday. They had urged the government to intervene immediately and ensure that oil companies consult with stakeholders before imposing any restrictions.
The statement further said that the PM has instructed the Petroleum Minister Ali Pervaiz Malik to visit provinces and, in collaboration with provincial authorities, develop strategies to ensure efficient use and uninterrupted supply of petroleum products to the public.
Read: Govt weighs 4-day workweek amid fuel fears
The PM also directed the establishment of a dashboard to monitor the movement of petroleum products in real time, "This will allow data to be shared with provinces and ensure effective oversight of fuel transportation," said the statement.
A day earlier, Ogra directed chief executive officers of oil marketing companies (OMCs) to ensure uninterrupted supply of petroleum products to retail outlets. The regulator warned of strict action against those involved in oil hoarding to pocket money from consumers by creating artificial shortage of fuel.
"In view of the prevailing geopolitical situation and potential market sensitivities, all oil marketing companies are directed to ensure uninterrupted supply and smooth distribution of motor spirit (petrol) and high-speed diesel across their retail networks nationwide," Ogra said in a letter sent to the CEOs of OMCs.
Oil for 28 days
Ogra has said that they have high stocks of oil to meet 28 days of consumption requirement of the country, following pre-emptive measures to import surplus fuel.
Owing to the US-Israel attack on Iran, however, two cargoes of crude oil have been stuck after the closure of the Strait of Hormuz. This channel is 21 miles (33 km) wide and a fifth of the world's oil passes through it.
The Strait of Hormuz was used to ship an average of 20 million barrels of crude, condensate and fuel per day last year. OPEC members like Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq depend on this shipping lane to export most of their crude, mainly to Asia.
"We have ample stocks of petrol and diesel to meet the country's requirement," officials said, adding that the country could meet the fuel needs of consumers for 28 days.
However, reports have emerged that the government has planned to import oil through the Red Sea from Saudi Arabia and the United Arab Emirates (UAE) due to the closure of the Strait of Hormuz, while also shifting to a weekly oil price review mechanism.
Sources told The Express Tribune that the government is currently working on various measures to ensure an uninterrupted oil supply amid US-Israel war against Iran.
Pakistan imports around one million barrels of oil on a monthly basis, with Saudi Arabia being a key oil exporter to the country. The UAE also exports oil to Pakistan.
Sources said that UAE-based firm ADNOC and Saudi Aramco will supply oil to Pakistan by bypassing the Strait of Hormuz. One refinery has already imported a few shipments through the Red Sea. A couple of oil vessels have reached Pakistan, while others are en route.
Finance minister unveils fuel conservation plan
A special government committee monitoring petroleum supplies on Thursday discussed introducing a four-day workweek with reduced working hours and shifting educational institutions to virtual learning as part of possible energy conservation measures.
Despite differences over the pace of action, committee members broadly agreed that the government would not be able to cushion the impact of rising global energy prices and would have to pass the full burden on to domestic consumers.
The minister further added that Pakistan has about 28 days’ equal stocks of petrol and diesel and 10 days of crude oil. There are also LPG stocks equal to 15 days of the country’s requirements, and we are closely monitoring the situation, said Aurangzeb, who is also the Chairman of the prime minister’s Committee to Monitor Petrol Prices in the wake of the emerging situation in the region, which was constituted by the prime minister and met for the third time on Wednesday.
He, however, said that the LNG cargoes had been stuck in Qatar and the government was closely monitoring the situation.
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According to a handout issued by the finance ministry, the petrol committee members reviewed energy conservation measures as part of broader contingency planning aimed at managing demand efficiently while maintaining orderly market conditions.
The committee emphasised that while supply conditions remain stable, prudent energy use and conservation at all levels would help strengthen national preparedness should international uncertainties persist, said the finance ministry.
Strait of Hormuz
Vessels have been receiving VHF transmission from Iran's Revolutionary Guards saying "no ship is allowed to pass the Strait of Hormuz". The Revolutionary Guards said Iranian forces had "complete control" of the Strait of Hormuz, a vital route for world oil and gas supplies, and any vessels seeking to pass risked damage from missiles or stray drones.
Strait of Hormuz also dubbed as energy corridor as millions of barrels of oil move from one part to another from here. PHOTO: REUTERS
The strait is the world's most vital oil export route, which connects the biggest Gulf oil producers, such as Saudi Arabia, Iran, Iraq and the UAE, with the Gulf of Oman and the Arabian Sea.
Some 20% of global oil, including from producers Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran, passes through Hormuz along with large volumes of liquefied natural gas from Qatar.
Tehran has for years threatened to block the narrow waterway in retaliation for any attack on the Islamic Republic.
Fourteen LNG tankers have shown signs of slowing down, U-turning or stopping in or around the Strait, said Laura Page from consultancy Kpler, who added the number will likely rise, posing risks to Qatari LNG exports.