Pakistani PM orders action against artificial fuel shortage

Pakistani Prime Minister Imran Khan (Photo: Reuters). Sketched by the Pan Pacific Agency.

ISLAMABAD, Jun 10, 2020, Pakistan Today. Prime Minister Imran Khan on Tuesday ordered maximum punitive action against those responsible for the artificial petrol shortage in Pakistan, Pakistan Today reported.

In a meeting of the federal cabinet, the prime minister directed the Oil and Gas Regulatory Authority (OGRA) and Petroleum Division to take necessary action to ensure regular supplies within two to three days, according to a notification issued detailing the developments in the meeting.

He also ordered Petroleum Minister Omar Ayub Khan and the OGRA to ensure that all oil marketing companies (OMCs) maintained 21 days’ worth of stock to meet the license conditions.

The cabinet took serious note of the artificial shortage of petrol in the country and, citing the legal power of the OGRA and Petroleum Division to enter and inspect oil companies’ storage facilities, directed for raid teams to be formed.

The teams would comprise the representatives of the Petroleum Division, OGRA, the Federal Investigation Agency (FIA), and respective district administrations.

“The teams shall inspect all petrol depots/storage. They have all authority to enter any site,” it added. “Anyone found involved in hoarding shall face full force of law, including arrest and forced release of such stores.”

Companies found to be not maintaining the mandatory stocks and supply to its outlets would face punitive actions, including suspension and cancellation of licence and heavy fines.

The cabinet was informed that supplies for June 2020 totaled 850,000 metric tonnes, as opposed to 650,000 metric tonnes in the comparable period last year. It consequently “urged the public not to engage in panic buying” and asked for hoarders to be identified and taken action against.

Earlier today, PM Imran chaired a cabinet session to review the countrywide situation and discuss important national matters, such as the upcoming budget and Pakistan’s response to and measures against the coronavirus.

Postal Services Minister Murad Saeed said the OGRA “kept on sleeping, while long queues formed outside the petrol pumps”.

Meanwhile, when Aviation Minister Ghulam Sarwar asked if there was oil stock left for seven days only, Special Assistant to Prime Minister on Petroleum Nadeem Babar responded saying there were 215,000 metric tonnes of petrol in reserve.

Ayub, the federal minister for energy, said some companies had stopped buying petrol after an increase of $12 in the global market. “The oil companies which ended the stock, we are cancelling their licenses,” he added.

Earlier this week, it was reported that petrol pumps across the country were facing a shortage of fuel supply, adding to the difficulties of the public as well as transporters. It was learnt that stations that did have petrol were charging double the price.

A local news outlet reported that Oil Companies Advisory Council (OCAC) has also clarified that OMCs have been replenishing their stocks through supplies from local refineries and imported shipments.

“For the month of June, a total of around 850,000 metric tonnes (MT) of petrol is being supplied from local refineries and imports to the distribution & retail network of the country. The current sales of petrol in the country are exceptionally high (50pc growth) due to the easing of Covid-19 lockdown in the past few weeks, causing depletion of stocks and low price of the product,” OCAC informed.

Earlier, on June 4, the Competition Commission of Pakistan (CCP) had taken notice of public concerns and complaints about the shortage of petroleum products in the country and had initiated an inquiry to see whether such a shortage is the result of any anti-competitive activity.

The CCP’s inquiry will determine the possibility of the existence of any anti-competitive practices causing the shortage of fuel in the country and the undertakings involved in it.

The inquiry will further examine why the impact of the reduction in the prices of oil have not resulted in the corresponding reduction in the prices of the lubricants and other oil-based products, including the prices of hi-octane, which are primarily deregulated products.

Similarly, OGRA had also expressed its reservations last week regarding high prices of HOBC and had asked OMC’s to set prices at reasonable levels keeping in view the interests of the consumers.

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