Petrol Shortage Disrupts Life in Pakistan

There is a short supply of petrol in Pakistan with Punjab province bearing the brunt of the crisis.

Pakistan is witnessing a petrol crisis as only four major oil marketing companies (OMCs), out of 50, hold 90 per cent of the petrol stock, while the rest are not importing the fuel fearing exchange losses.

There is a short supply of petrol in the country with Punjab province bearing the brunt of the crisis. Major and smaller cities, towns and villages in the province do not have the major fuel, The News reported.

The crisis has worsened in the last few days despite the government’s warning to the people from hoarding petrol in anticipation of an increase in its price in the next fortnightly review, slated for February 15.

Sources in the country’s oil sector have squarely blamed the oil marketing companies, petroleum dealers as well as the government. They pointed out that the majority of the companies were not importing petrol in view of exchange losses, which the government had adjusted only partially and that too, in different phases.

They said that smaller OMCs did not have even 20 days’ stock of petrol as they were not importing the fuel because of fears about exchange rate losses, The News reported.

Only Pakistan State Oil (PSO), Shell Pakistan, Total Parco and Attock Petroleum were importing petrol and 90% of the stock lies with these four companies. There are around 50 OMCs operating in the country and some have limited stock whereas others have gone dry.

“Who will import petrol when there are apprehensions that exchange rate losses would not be adjusted and would take time to be paid back,” an official of an OMC asked.

An employee fills the tank of a car at a fuel station in southwest Pakistan’s Quetta. (Xinhua/Irfan/IANS)

Sources said that other than the low import of petrol by the majority of OMCs, petroleum dealers were also having a field day and were involved in the hoarding of petrol in view of the expected increase in prices by mid-February, The News reported.

The ex-refinery price of petrol is showing an increase mainly because of massive dollar appreciation against the rupee. Dealers are exploiting the situation by indulging in hoarding to make windfall profits, oil sector people stated.

The policies by the government have also contributed to the petrol shortage, especially related to taxation on petroleum products, The News reported.

Amid claims of adequate availability and the government warning of stern action against hoarders, the shortage of petrol persists across Punjab disrupting the routine life of the public at large, Dawn reported.

The situation is worst in remote areas where the pumps have had no supplies for the last over a month, Dawn reported.

On the other hand, the Pakistan Petroleum Dealer Association (PPDA) has held all Oil Marketing Companies (OMCs) responsible for not ensuring adequate supplies as per demand thus making the pumps dry and leaving the motorists with no option but to search for petrol in cities.

Rejecting the claim, the OMC Association of Pakistan (OMAP) said some pumps were involved in hoarding petrol and causing artificial shortages to earn more profits keeping in view the expected increase in petroleum prices.

“At present, 30 to 40 per cent of the total 450 pumps in Lahore and its outskirts have no petrol due to squeezed supplies from OMCs, including the largest public sector company and two international firms. Previously these three companies were never to be allegedly involved in such practices. But now they, like others, have started playing such tactics,” PPPDA Punjab Information Secretary Khawaja Atif claimed.

Finance Minister Ishaq Dar holds a meeting with IMF review Mission led by IMF Mission Chief Mr Nathan Porter

Refineries warned of a looming petrol crisis by mid-February if the government fails to resolve the payments issues of imported raw materials and additives needed by the sector, The News reported Friday.

The delay in payments of raw materials and additives as well as the dollar shortage hampered the production of petrol massively, the refineries explained.

“The situation will become extremely critical mid-February 2023, if remedial measures are not taken immediately,” local refineries warned State Minister for Petroleum Dr Musadik Malik and Governor State Bank of Pakistan (SBP) Dr Jameel Ahmed in separate letters. The letters were jointly written by Pakistan Refinery Limited, National Refinery, Attock Refinery and Cnergyico Refinery, The News reported.

Difficulties in establishing letters of credit (LCs) for the payment of raw materials and other inputs needed by the refineries have been cited as the major cause of the looming crisis.

Punjab has already started experiencing the unavailability of petrol, after alleged hoarding in anticipation of the price hike expected in the next fortnightly review.

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