Petroleum Division inaction leads to POL supply crisis

ISLAMABAD: The inaction which is not taken by Petroleum Division and Ogra has factually led to the POL supply crisis in the country which continued to haunt the masses for the last 10 days. Rather the role of high ups of petroleum division has emerged as highly questionable if the developments starting from May 30 until now are critically examined.

The background interaction and discussions with senior officials of petroleum divisions and top Industrial sources and documents available with The News suggest that it is non-other than the Petroleum Divisions’ top leadership’s inaction which has led to the POL supply crisis. Spokesman for Petroleum Division version is also included.

According to the documents, Petroleum Division pleaded the case of OMCs in ECC meeting held on May 30 asking the government not to reduce the POL price from June 1, 2020 which was due in the light of massive reduction in prices proposed by Ogra arguing that if the prices are reduced, then OMCs will create severe supply crisis of petroleum products as they will not bear the inventory losses.

Petroleum Division had advocated to pend the reduction in the POL prices till June 15 to keep the OMCs away from the losses. Petroleum Division also warned of POL availability crisis saying the stocks of most of the OMCs were abnormally low. This clearly shows that Petroleum Division did not take the required actions against the said OMCs for not maintaining the stocks enough for 21 days.

This clearly indicates that Petroleum Division that represents the government and is supposed to safeguard the due rights of the masses in ECC meeting held on May 30 pleaded for taking care of oil marketing companies interests. Interestingly, Petroleum Division didn’t market in ECC meeting any strategy to counter the expected artificial POL supply crisis. This means that petroleum division informed about ECC on May 30, 2020 about the intention of OMCs about creating the artificial POL availability crisis and pleaded for no reduction of POL price from June 1, 2020, but failed to take required actions from June 1, 2020 and kept on witnessing the masses miseries emerged out of POL supply crisis.

Spokesman for Petroleum Division however did not agree with the impression that Petroleum Division was not proactive to resolve the crisis on war footing basis saying it has timely informed the Ogra to take actions and suspend the licenses of the OMCs which are involved in the hoarding of the POL products and are responsible of the creating artificial POL supply crisis. However, he offered no comments when asked as to why Petroleum Division has not started raids and crackdowns against POL products hoarders which are initiated after June 8 and why petroleum division let OMCs play their dirty game.

However, according to an investigation carried out by The News, It is noted that an artificial POL supply crisis emerged from June 1, 2020 which is still underway, but the ministry remained failed to take the actions from June 1, 2020 till June 8, 2020. However it became active now not its own but after the intervention of the top man of the country Prime Minister Imran Khan and started raiding raids on the fuel stocks hoarded by the OMCs. The question arises in the whole episode as to why the Petroleum Division failed to launch the crack down from June 1, 2020 on its own and why it let the OMCs play the dirty role. So the whole chain of events makes the role of top bosses of the Petroleum Division questionable.

More importantly, Petroleum Division again in the ECC meeting held today (Wednesday) pleaded for more raise in POL prices by Rs9-10 per liter though new pricing mechanism to be on fortnightly or monthly bases. However, a committee comprising minister of Industries and production M Hammad Azhar, Adviser to PM on Commerce and Textile Mr Abdul Razak Dawoods, Special Assistant to PM on Petroleum Mr Nadeem Babar and Secretary Finance and Secretary Petroleum has been constituted which will look to the matter and furnish its recommendation for ECC for approval of new pricing mechanism which will depart from the existing pricing formula based on FOB cargoes imported by PSO.

On June 8, 2020, in the meeting on the POL supply crisis which was attended by top bosses of OMCs, refineries, officials of Ogra, Petroleum Division. The Energy Minister Omar Ayub Khan in the meeting announced the constitution of an eight member committee to “verify the availability of stocks in the depots of the Oil Marketing Companies (OMCs) and their supply to the retail outlets”.

Later on Petroleum Division notified the committee led by Director General Oil Dr Shaf-ur-Rehman Afridi and has representatives of the Oil & Gas Regulatory Authority (Ogra), Pakistan State Oil (PSO), district administration, Hydrocarbon Development Institute of Pakistan (HDIP) and a member of the Federal Investigation Agency. That committee started drive of crackdown on the POL stocks and embraced many success and managed to recover the he stock at Keamari, Karahi hoarded by two OMCs namely Hescol Petroleum Lmited and Gas & Oil Pakistan Limited and in KPK at Taru Jabba, huge stock of Shell company has also been recovered and the MD of Shell company has now promised to make its all dry-out outlets wet across the country from today (Thursday). The FIRs have been registered against the companies.

In the June 8 meetings, Oil Marketing Companies (OMCs) and refineries had again asked the government to revise upward the POL prices from June 15 to do away with the supply crisis arguing it is not possible to import petroleum products at higher prices and sell them at much lower prices. The Managing Directors of OMCs and refineries asked the government to revise the POL prices from June 15, as under current notified prices, they are unable to brave more losses. However, the government side did not offer any commitment to revise the prices by June 15 but promised to try to convince the decision makers to this effect, a senior official who was part of the meeting told The News.