The Economic Co-ordination Committee (ECC) of the Cabinet has been presented oil stock position, indicating building up of petroleum products storages to an all-time high of 26 days as on October 13, 2008. The presentation reveals that Pakistan's strategic refined oil reserves in the first week of October last year were of 21 days consumption.
The oil reserves have been built up substantially at a time when Pakistan faces serious financial crisis with its forex reserves fast depleting due to huge import bill. Addition in oil stocks is of paramount importance at a time when the government is looking for different options to curtail import bill. The presentation on oil stocks was given to the ECC by the Ministry of Petroleum and Natural Resources (MP&NR) in its meeting held on October 14.
Sources said the MP&NR acting secretary G A Sabri told the ECC that on the instruction of the government, oil stocks have been built up to 26 days to make sure the availability of petroleum products for a reasonable period. He said the MP&NR will continue to build up oil stocks to maintain a satisfactory level to meet reasonable domestic market demand.
The break-up of different petroleum products stocks given to ECC shows that as on October 13, HOBC's stock was of 19 days, MS 12 days, JP-1 20 days, kerosene 29 days, HSD 48 days, LDO 25 days and furnace oil 27 days and at an average, stock of all oil products was of 26 days.
The ECC was informed that PSO and other oil marketing companies have been given standing instructions to maintain a satisfactory level of all petroleum products to meet the market demand particularly in wheat sowing season. Petroleum products demand, especially of diesel, rises substantially during that season.
Pakistan is required to have oil reserves of at least 18-20 days. The stock position over and above average days can help OMCs absorb any unexpected disturbance or suspension in oil supply chain.
Petroleum acting secretary told the ECC meeting that it is true the oil import bill is eating away a major chunk of forex reserves, but the government was providing required financing to import petroleum products for building up stocks.