Pakistan likely to face petrol, diesel shortage in May, June

KARACHI: Pakistan is likely to run out of petrol and diesel in May and June to meet local demand as the government’s lack of firmness in resolving differences over lockdown compounded impact of the pandemic-driven supply chain disruption, sources said on Monday.

The sources said there is likely to be diesel and petrol shortage in second half of May and June due to planning and approval delays at the ministry of petroleum and non-availability of cargo ships globally. Since the virus outbreak earlier this year, the federal and provincial governments locked horn over the significance of lockdown to curb spread of the novel coronavirus with Sindh government adamant to keep industrial and economic activities shutdown without managing alternatives to mitigate economic losses.

The petroleum ministry, in a previous statement, said that there are enough oil stocks till May 15.

In March, the ministry of petroleum stopped oil marketing companies to import due to lockdown.

“The ministry did not lift this embargo in time for imports for April and May and approvals were issued for limited quantity,” a source said. Industry sales, reported on May 1, were 63,732 metric tons for high speed diesel and 48,050 metric tons for premium motor gasoline.

“This has raised the fears of possible dry-out in the country if the supply chain planning is not improved immediately,” an industry official said, requesting anonymity.

Sources said the permission to import petroleum products for June has not yet been issued by the ministry of petroleum. The industry is baffled at such delay in approval in face of the operating environment globally.

Sources said ex-chairman senate Raza Rabbani, in a meeting, raised questions about reasons behind shortages of petroleum products.

Oil marketing companies demand approval of June imports of high speed diesel and motor gasoline at the earliest to ensure timely availability of products in the country. They also demand streamlining the current process of import planning at the ministry of petroleum and quarter-wise forecasting rather than weekly basis. Oil marketing companies also seek immediate permission to import product as per their marketing demand to fulfill the Oil and Gas Regulatory Authority’s requirement of 20 days stock cover.

There are already reports of non-availability of fuels and full benefit of reduction in oil prices would not be passed on to consumers.

“Consider, this is peak harvesting season and commercial traffic has picked up after ease in lockdown,” said the official.

The companies importing petroleum products are facing very challenging conditions globally due to non-availability of cargo ships. Majority of the ships are booked at over 400 percent higher than the normal prices to store oil by refineries, producers and traders due to low demand after lockdown.