OMCs had placed a request for the import of 1,430 tons to bridge the deficit in October, but the director general oil of the Ministry of Petroleum turned it down, saying import of such a small quantity was not justified. PHOTO: FILE
With a phenomenal rise in demand, different parts of the country have gone short of high octane blending component (HOBC), prompting oil marketing companies (OMCs) to look at the Ministry of Petroleum in the hope that it will allow fuel import to tackle the shortage.
Motorists across the country are complaining that oil filling stations have run dry despite growing demand for HOBC - a type of quality fuel for vehicles.
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According to oil industry officials, the sale of HOBC has soared about 250% compared to the previous year primarily on the back of declining prices. However, its supply has failed to keep pace with market demand as Parco, the only refinery that produces HOBC in Pakistan, does not have the production capacity to meet the entire requirement.
“This means that the deficit will have to be met through imports to bridge the gap,” said an official while talking to The Express Tribune.
According to officials, OMCs have been consistently raising concerns over dwindling HOBC supplies at various forums including the monthly product review meeting in October. The meeting was chaired by the director general of oil and attended by representatives of the OMCs, refineries, Ministry of Petroleum and Natural Resources and the Oil and Gas Regulatory Authority (Ogra).
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The OMC representatives highlighted the growing demand for HOBC as over 4,092 tons were sold in September alone. Parco officials said the refinery could only produce 3,500 tons at 100% capacity, which was not enough to meet market needs.
OMCs had placed a request for the import of 1,430 tons to bridge the deficit in October, but the director general oil of the Ministry of Petroleum turned it down, saying import of such a small quantity was not justified.
He suggested that the demand should be met through the allocation of HOBC keeping in view average sales of the last three months.
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In the face of rising demand and profit potential, OMCs were willing to import the fuel to address the shortage. However, the Ministry of Petroleum has directed them to write a letter to Ogra, seeking permission for HOBC import and its pricing mechanism.
“To date, neither the ministry nor Ogra has responded to the OMCs’ queries and as a result the shortage of HOBC has intensified leading to considerable problems for everyday consumers,” the official said.
When asked for comments, Petroleum Minister Shahid Khaqan Abbasi said OMCs did not need to get any permission for oil import and Ogra had no role in bringing oil supplies from abroad.
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Talking to The Express Tribune, Ogra Executive Director Nauman Shahid said the regulator had no role in the import of petroleum products that were in deficit. It fell within the purview of petroleum ministry, he said.
He, however, stressed that Ogra could take action in the case of shortage of petroleum products and its teams were being mobilised to assess the scarcity, if any, of HOBC in different areas of the country.
Published in The Express Tribune, November 18th, 2015.
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