OCAC warns Pakistan could see shortage of petroleum products in coming days

Oil Companies Advisory Council (OCAC), a representative body of the downstream oil industry, has warned of a shortage of petroleum products in Pakistan in the coming days owing to inadequate imports and limited local availability.

OCAC, in a letter sent to the Oil and Gas Regulatory Authority on November 3, a copy of which is available with Business Recorder, said that during a product review meeting for the month of November held on 13 and 14 October, a deficit of 210,000 MT of High-Speed Diesel (HSD) and 147,000 MT of Motor Spirit (MS) was identified.

“It was highlighted in the meeting that HSD imports in November might be challenging owing to limited availability of molecules in the International market and very high premiums; hence so far, only PSO has booked laycans of 220,000 MT and 10,000 MT by Flow Petroleum.

However, it is alarming to note that MS import laycans corresponding to the anticipated sales volume and stock cover have also not been booked,” said OCAC in its letter.

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The body said that import plans should have been finalized by importers “but as of today, there is a deficit in the import plan.

“This critical issue was also highlighted in the meeting held on November 1 with industry representatives, however no firm commitments have been received from the importing Oil Marketing Companies (OMCs) in writing,” it highlighted.

OCAC stated that quite a few OMCs have had October sales much higher than anticipated and have been continuously carrying low stocks of fuel products since October 2022.

“Some OMCs who were supposed to bring imports for use in October received their shipments in the last week of October hence product was not available for use during the month it was intended for.

Similarly, some OMCs who were allowed imports in the previous month for use next month have already consumed the parcels in advance,” it said.

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"Considering the ongoing sales trend and the number of days cover currently being maintained by the OMCs, we foresee product availability challenges in various pockets of the country in days to come, due to inadequate imports and limited local avails," it added.

It urged the Oil and Gas Regulatory Authority to look into this matter and issue necessary directives to importing OMCs, “for strict adherence to their imports plan along with written confirmation in order to avoid any untoward situation.”