KARACHI, May 29: Around 125 paint manufacturers out of 300 in Punjab have suspended production of oil paints owing to severe shortage of kerosene.

The black marketing of kerosene has been on its peak and market people are exploitation the situation by selling it at Rs55-60 per litre despite its official price of Rs41.44 per litre, vice-chairman Pakistan Paint Manufacturers Association (PPMA), Khawaja Aijaz, told Dawn from Lahore on Thursday.

He said some 75 per cent of the factories use kerosene as main raw material in manufacturing of oil paint, while 25 per cent units are use MTT (tarpin), which makes high quality paint.

However, big paint makers in Karachi usually use MTT as main ingredient for producing high quality paint.

Since the price of MTT has surged to Rs81 per litre from Rs48 in August and Rs28 two years back, many paint makers are using kerosene as main raw material for oil paint owing to big price difference.

He said some 10 factories in Punjab also export oil paint to Afghanistan worth $1.5 million per month. He added that the local price of oil paint had surged by 30 per cent in the last three years.

Meanwhile, a local refinery official expressed surprise over the fact that the kerosene had been in short supply in the markets in summer season when its demand usually remains very low.

He said that diesel dealers in rural areas had been active in lifting kerosene in higher quantities and are mixing it with diesel due to a price difference between diesel and kerosene.

“Even if 10 per cent of kerosene is added in diesel it will not make any adverse impact on the quality of diesel,” he said adding that diesel in rural areas is sold in drums. The government is providing Rs28 per litre subsidy on diesel to keep its price stable otherwise its price would have gone very high. Diesel is selling at Rs51.13 per litre.

A petroleum dealer said the practice of mixing kerosene in diesel had been thriving in interior Punjab and Sindh mainly, but this is not being practiced in Karachi.

An official in the Pakistan State Oil (PSO) said that the kerosene was supplied on priority basis and in fixed supplies to aviation, railway and Armed forces, while the rest of the quantity is consumed in the market.

He said currently refineries had slowed down production of not only kerosene but other oil products owing to payment problem from the government to the producers and the oil market companies (OMCs). Power plants and other state owned organisations have not paid to the OMCs.

Meanwhile, a delegation of Sindh Paint and Resin Manufacturers led by Muhammad Saleem Farooqi held a meeting with KCCI senior vice-president Iftikhar Ahmed Sheikh and informed him that the oil refineries had stopped production of kerosene, thus causing a serious crisis. Due to severe shortage of kerosene hundred of paints, varnish and plastic goods making units have badly suffered.

Mr. Farooqui said that the consumption of kerosene in Sindh was approximately 600,000 liters per day. The production of kerosene had been stopped since last month by the producing units on the plea that the government had withdrawn subsidy, but the prices of kerosene had not been increased.

He said the situation was worsening due to non-availability of kerosene in the rural areas, which badly affects the life of the common man in rural areas.

Iftikhar Ahmed Sheikh assured the delegation that the KCCI would approach the concerned government agencies for early resolution of the problem.

According to figures of the Oil Companies Advisory Committee (OCAC) sale of kerosene in July-April 2007-08 surged by 11 per cent to 192,869 tons as compared to 174,106 tons in the same period of 2006-07.