ISLAMABAD: With shortage of major petroleum products aggravating with none of more than 80 oil companies maintaining the mandatory stocks, the authorities — both in the petroleum division and petroleum regulator — appeared waking up to the situation as complaints started to reach the prime minister’s desk.

The director general of oil wrote to the Oil & Gas Regulatory Authority (Ogra) that product shortage was expected in July. Ogra wrote back to the DG of Oil to align oil imports to domestic demand. The regulator also issued show-cause notices to six of the leading oil companies for violating petroleum rules that required at least 20 days of sales cover.

Oil industry sources said that certain import orders were missed by Oil Marketing Companies (OMCs) in May and some others were rearranged by authorities over the past few weeks as shortages built up.

Ogra issues show-cause notices to six OMCs for violating stock rules

The CNG industry jumped to the situation and called upon the government to reduce gas prices to encourage motorists to use CNG while petrol pumps were facing shortages. Motorists suffered the most amid rationing by OMCs.

Ogra on Wednesday conceded in various communications the grave situation of unavailability of petrol and diesel while industry experts noted it could take 10 to 15 days for the supply chain to return to normal as import orders are lined up and dispatches from local refineries reach all parts of the country. Dry outs were reported in many areas of Punjab, Balochistan, Khyber Pakhtunkhwa, Azad Kashmir and Gilgit-Baltistan while some difficulties were also reported in Sindh.

“Ogra has also issued show-cause notices to three OMCs – Shell Pakistan, Attock Petroleum and Total Parco Pakistan – where major dry-outs have been reported,” said Ogra spokesman Imran Ghaznavi.

He said that replies had been sought within 24 hours. He said that Ogra had also responded to citizen complaints on Prime Minister’s Citizen Portal on fuel shortage at retail outlets and three more show-cause notices had been issued to OMCs namely Gas and Oil, Puma and Hascol.

“In the wake of the grave situation of un-availability of petrol/diesel and to protect consumers’ interest for provision of uninterrupted supplies, you are hereby advised to show cause in writing…to explain as to why action against the company may not be proceeded under rules 66 and 69 of the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2019,” said Ogra notices sent to six companies.

Separately, it issued directives to 32 other companies to remind that physical verification through HDIP proved that several retail outlets were running dry or short of products, effecting product availability to consumers. These OMCs were asked “to ensure the availability of petroleum products on most immediate basis and in timely manner at their retail outlets keeping in view the demand to avoid any inconvenience to commuters”.

Officials said the prime minister had also taken serious notice of the petroleum shortages and expressed displeasure over the role of authorities concerned for the fact that the benefit of reduction in petroleum prices announced by the government had not reached the consumers and rather led to their difficulties.

Ogra also wrote to the chief secretaries of Punjab, Sindh, Balochistan, KP, GB and AJK and commissioner of Islamabad to ensure availability of oil stocks at retail outlets of OMCs but without saying supplies could be ensured without sufficient storages at any of the OMCs or refineries.

Industry experts said shortage situation was building overtime as evident from minutes of the regular product review meetings and daily availability of product sales and stocks position to all but petroleum division and Ogra were found wanting in taking action against delinquent OMCs owing to conflict of interest. They said the government should immediately purge its ranks of officials having relatives working in oil companies.

Ogra also wrote to the petroleum secretary to remind that daily stocks and supplies position (DSSP) of the oil industry was submitted by Oil Companies Advisory Council on the basis of Product Review Meetings (PRM) under Directorate General (Oil), Ministry of Energy.

The Ogra said the PRM discussed the product situation and decided in the light of local refinery production as well as planning for imports, to cater the demand of petroleum products and ensure adequate stocks build-up of OMCs. It confirmed that Hydrocarbon Development Institute of Pakistan (HDIP) was tasked to physically verify the product availability at refineries storages, OMCs depots and retail outlets randomly.

The preliminary report of the HDIP showed slight/minimal variations between product availability against the position as reported in DSSP by OCAC.

Published in Dawn, June 4th, 2020