ISLAMABAD: Amid a rising price trend following renewed US-Iran attacks, Pakistan`s oil supply chain players appeared nervous as petrol stocks declined to a 14-day cover on Thursday, prompting the government to urgently resolve procedural issues and activate enforcement mechanisms to discourage hoarding and profiteering in the market.

Informed sources said the government may have to return to the fuel conservation mode adopted over the past couple of months as it reviews the latest regional situation.

An urgently called session with the oil industry by the recently created National Coordination and Management Council (NCMC) a civil-military forum on energy supplies reviewed the availability of petroleum products across the country.

Minister for EconomicAffairs Ahad Khan Cheema is the chairman and Lt Gen Zafar Iqbal the co-chairman of the executive committee of the NCMC.Informed sources said petrol consumption had goneupoverthe pastthree weeks following a substantial price cut of around Rs74 per litre on June 19.

In the first half of July, petrol consumption was almost 18-20 per cent higher year-on-year, while diesel demand was about 40pc higher than the fiveyear July average.

Sources said this was a clearindicationofreduced smuggled inflows from Iran due to a lower price gap incentive.

The cancellation of a couple of planned Pakistan State Oil import cargoes, due to non-clearance by the NCMC amid fallingglobal prices before the interim US-Iran peace agreement, also contributed to the pressure.

Subsequent tensions sent import premiums sharply higher. PSO`s two latestpetrolcargoesattracted a premium of around $25 per barrel, up from about $12around10daysago.

As of Thursday, petrol and diesel were estimated to cost around Rs10-12 and Rs40-42 per litre more, respectively, creating room for dealers to seek greater supplies from oil marketing companies and for hoarders to benefit from a possible price increase.

While PSO remains the national fuel lifeline, smaller players are hesitant, citing over Rs66 billion in pending price differential claims against the government.

As if that was not enough, oil companies also complained about challenges in customs clearance.

Diesel stocks now stand at around a 21-day cover, and local reñning is keeping pace with requirements.

Petrol consumption currently stands at around 25,000 tonnes per day against stocks of 345,000 tonnes, while local refineries can contribute no more than 9,000 tonnes per day.

High-speed diesel stocks stand at around 465,000 tonnes against daily consumption of about 23,000 tonnes, while local refineries supply around 16,000 tonnes per day.

It was against this bacl(drop that the Oil Companies Advisory Council (OCAC) an association of over three dozen reñners and OMCs raised red flags byissuing an urgent warning to the government about an emerging supply chain challenge.

During the NCMC meeting, `the supply-side challenges highlighted by the representatives of the OCAC were discussed and addressed`, an official statement said. The committee observed that OCAC`s concerns primarily stemmed from an abnormal increase in petroleum product sales during the first 15 days of July. Analysis presented by Ogra also indicated the possibility of hoarding in anticipation of a potential price increase, the statement added.

`The NCMC emphasised that Ogra`s enforcement mechanism should play a more proactive roleand urged provincial governments to ensure that there is no hoarding and that petroleum products remain readily available to the general public without any inconvenience,` the NCMC said after the meeting.

The meeting was also attended by Petroleum Minister Ali Pervez Malik, representatives of OMCs, refineries, OCAC, Member Customs FBR, Ogra and other relevant stakeholders.

`The committee reaffirmed that petroleum product stocks in the country are sufficient and directed all relevant stakeholders to maintain uninterrupted supply across the country,` the statement said.

Informed sources said customs authorities promised to removechallenges at their end immediately.

A day earlier, the OCAC had briefed the government about the challenges and demanded immediate disbursement of about Rs67bn in price differential claims to ensure smooth supplies.

It had complained that a portion of existing stocks was unavailable for sale due to bottlenecks in the customs clearance process, effectively reducing immediately saleable inventory.

`Under the prevailing circumstances, any further delays in customs clearance could materially impact product availability and increase the likelihood of localise d shortages, especially in upcountry locations,` the OCAC said.