The expected shortage of fuel is likely to hit the country within the week, informed sources told Business Recorder on condition of anonymity. Airlines including PIA are also likely to face jet fuel shortage due to lower production by oil refineries.
Reliable sources said that Shell has issued a warning letter to the Civil Aviation Authority (CAA) asking it to make alternative arrangements due to falling jet fuel stocks. Any shortage of jet fuel could disrupt the Haj flights and PIA and other airlines' operations, sources said.
Shell informed the CAA that the company was facing shortage of jet fuel due to lower production by oil refineries. Shell has also noted that its stocks could deplete due to oil refineries' low production. It urged the CCA to make alternative arrangements for PIA. Sources said that Karachi airport was receiving fuel from two oil refineries - PRL and NRL. PRL is shut for one week and the NRL was operating at 50 percent capacity, which has resulted in shortage of fuel for airlines.
They said that Shell is the supplier of jet fuel to PIA together with Pakistan State Oil (PSO) and Chevron. Shell also provides fuel to PIA (Karachi terminal). The three fuel suppliers will hold an emergency meeting on Monday in Karachi to review the fuel supply situation of jet fuel.
These major fuel suppliers were also relying on the local oil refineries for jet fuel supply to PIA. Shell has warned the CAA that its stocks of jet fuel were going to dry out and asked the authority to make alternative arrangements in case of fuel stock shortage. The Oil Marketing Companies are facing the same situation with respect to jet fuel stocks.
Sources noted that these OMCs had been pointing out the gravity of the situation but the government was stressing that the oil refineries must provide jet fuel to the airline. They said that after the government requested the oil refineries to provide petrol to OMCs to meet the requirements, they dropped the production of jet fuel. Local oil refineries were providing both jet fuel and petrol and these two products were not being imported.
The consumption of jet fuel by airlines had increased due to Haj flights and the production by oil refineries has been reduced as compared to consumption. Sources said that if the stocks of jet fuel dry out, these flights may try to access more fuel upon arrival in Riyadh. If this happens, scarce foreign exchange would be used to make the payment, sources added.
Shell was providing fuel to PIA in Karachi and Islamabad whereas Pakistan State Oil (PSO) was covering the PIA flights in Lahore. They said that if Shell and Chevron stopped fuel supply to PIA, PSO will be the only entity bearing the burden of supplying fuel to PIA.
When contacted, Abid Ibrahim, spokesman of Shell, said that Shell was unable to meet the demand for jet fuel by PIA at Karachi Airport. He also confirmed that Shell administration had written a warning letter to Civil Aviation Authority highlighting the shortage of jet fuel due to lower production.
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