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Oil refineries, firms told to boost supplies

By Khaleeq Kiani 2020-05-18
ISLAMABAD: Amid tight demandsupply conditions of high-speed diesel during the wheat harvesting season, the government has asked the oil marketing companies and refineries to beef up supplies of major transport fuels ahead of Eidul Fitr.

In an advisory issued on the weekend, the petroleum division directed `all OMCs to enhance their logistics movement from Karachi to upcountry locations so that sufficient stocks would bemaintained at OMC depots` It also directed all the OMCs and refineries tooperate theirdepotsandinstallations even during the Eid holidays, except the Erst and second day of Eid, while the retail outlets would remain operational without any holiday.

The petroleum division also told the OMCs and refineries that depots and installations would remain operational on Sunday (May 24) in case Eidul Fitr falls on Monday (May 25) in order to ensure uninterrupted supplies at all retail outlets.

The Oil & Gas Regulatory Authority (Ogra) and Oil Companies Advisory Council (OCAC) were asked to ensure that all the retail outlets remain operational throughout the country without any break.

The advisory followed recent shortages of HSD supplies in many parts of the country, as the farmers and associated supply chain struggled to meet theirwheat harvesting and transport requirements in the middle of uncertain weather conditions. The OMCs blamed each other and the petroleum division`s directorate general of oil for failing to meet their obligations and unilateral changes by the officials of the directorate general of oil to the consensus decisions of the industry and the government.

The oil industry then formally protested over the changes to the common decisions of the product review meetings while the office of the directorate general of oil asserted that it was its sole jurisdiction to take decisions on oil supply chain arrangements.

The OCAC then reminded the petroleum division that it was an independent organisation formed by refineries, oil marketing companies and a pipeline company to represent the downstream oil industry at various government and non-government forums in matters relating to common interestsof the industry.

It said the OCAC collected, collated and prepared extensive data from the oil industry and presented working papers in the Product Review Meeting (PRM) for petroleum division to take decisions on approval of imports of petroleum products which DG (011) office had been mandated under the petroleum rules.

The OCAC said even disagreements were properly recorded and decisions notified with the approval of the petroleum division on the OCAC letter heads, but unilateral changes were never made by any side including the directorate general oil.

However, the DG Oil asserted that OCAC`s role was limited to the convening of meetings, prepare draft minutes and circulate the approved minutes to the industry. Also, since such meetings are presided over by DG Oil, he had the authority to approve minutes. The OCAC took the stand that in such an eventuality, the petroleum division or the DG Oil should communicate its decisions separately on government letterhead. It said the minutes and papers of product review meetings had been OCAC`s responsibility that it also had to represent in front of Investigating Agencies and hence the OCAC would not acceptin the recentpastany afterthoughts or unilateral insertions.

Earlier this month, the state-run Pakistan State Oil (PSO) had demanded an investigation into diesel shortages and why some OMCs failed to meet their mandatory 21-day stocks cover.

The PSO had also put on record that its oil imports were cancelled by petroleum division officials despite warnings over possible shortages and its timely reports, which said `a few major OMCs were not uplifting products fromlocal refineries and not maintaining adequate days` cover of products (particularly HSD) despite high sales trend` The PSO also brought on record that the petroleum division not only allowed HSD imports to a few OMCs in the last week of April but alsoberthed theirvesselsin a prompt manner to keepadequate stocks in White Oil Pipeline and upcountry.

`However, these OMCs did not make these cargoes available at upcountry, rather off-loaded at their Port Qasim terminals despite critical stocl(s in WOP, seemingly to exploit the expected PDL increase effective May 1, and earn hefty profits accordingly`.