Petroleum Division calls meeting to discuss HSD supply strategy

KARACHI: The Petroleum Division has called a key meeting of the Oil & Gas Regulatory Authority (Ogra) and five refineries of the country regarding the import of high speed diesel (HSD) for November. The meeting, scheduled for Friday (today), was called after controversy erupted over permission granted to private sector oil marketing company Gas & Oil (GO) to import 76000MT oil.

The meeting has been called by the DG of the Oil Petroleum Division and is to be attended by the Ogra chairman and top officials of five refineries.

The refining sector had objected to the import permission for GO on the ground that import of 190000MT by Pakistan State Oil (PSO) -- a state-owned oil marketing company (OMC) -- is sufficient to fill the gap between local production of HSD and its demand.

Ogra justified its decision on the ground that HSD sales in the current month of October 2024 are up by 21 per cent against the projected sales due to the anti-smuggling drive initiated by the federal government and the start of the agri season. The high sales have depleted the stocks, which had earlier been reported as high by refineries and are now enough only to cater to 19 more days of national consumption.

The monthly Product Review Meeting for November, 2024 held on October 22 decided to allow import of around 266,000MT to fulfill the deficit during November, catering for sales and the replenishment of depleted stocks. According to Ogra, “The month of November is critical due to the agri season and the country’s major supply source PARCO (contributing nearly 50 per cent of the country’s refinery production) is offline for 40 days”.

The demand of HSD surged in the month of October on the back of anti-smuggling actions and the upcoming harvesting season in the country, with HSD sales at 609000MT so far in October compared to 490000MT in the month of September this year.

The refining sector termed the surge in demand positive for the formal oil sector of the country after government actions helped to check the smuggling of HSD from Iran. However, the sector disagreed with the decision to allow import of HSD from the private sector, making the case that “import by Pakistan State Oil (PSO) is sufficient to fill the gap of local production and demand of HSD”.