Petroleum crisis looms large, warn oil companies

The oil companies warned the government that a possible petroleum crisis is looming large over the country due to the shortage of US dollars and several other factors, ARY News reported on Friday.

The Oil Companies Advisory Council (OCAC) penned down a letter on behalf of Oil Marketing Companies (OMCs) and refineries to Oil & Gas Regulatory Authority (OGRA) and the federal government about the unavailability of raw materials.

The OCAC in a letter to the federal government highlighted the challenges being faced by the oil companies due to the shortage of petroleum products, US dollars, rupee devaluation and limited issuance of letters of credit (LCs) for imports.

The advisory council expressed serious concern over the devaluation of the rupee due to which OCAC is facing a loss of over billions on daily basis. Moreover, the unavailability of dollars is interrupting the supply chain and production of petroleum companies.

READ: OIL COMPANIES SOUND ALARM ON FUEL SHORTAGE IN LETTER TO GOVT

OCAC urged OGRA to transfer the pressure on the public by an increase in the petrol and diesel prices to recover the marginal profit otherwise the oil industry will continue suffering from the financial crisis.

In the letter, the oil advisory asked State Bank to order the banks to immediately increase the limit of LCs of oil companies to allow them for importing oil and meet the industries demand.

“If LCs are not established on a timely basis, critical imports of petroleum products would be impacted which may lead to a fuel shortage in the country. It may be noted that if the supply chain is compromised, it may take six to eight weeks to normalise,” OCAC said in the letter.

OCAC also sought an urgent meeting with the State Bank of Pakistan (SBP) governor, OGRA chairman and Ministry of Finance and Ministry of Petroleum.

As per the details, the oil refineries are closed for the past eight days due to the non-availability of raw materials. The refineries will remain closed until the availability of raw materials.

Earlier in the day, the supply of petrol and diesel to Balochistan from the Quetta Oil terminal has been suspended as only three days petrol stock left in the petrol pumps.

Chairman Oil Tankers Owners Association urged authorities to restore the supply immediately otherwise Quetta will face petroleum crisis.

It is pertinent to mention here that after the supply is restored, it will take four days to restore the supply of petrol and diesel to Balochistan.