A fuel shortage crisis is expected to hit the country in the coming days amid insufficient imports and local availability of petrol and high-speed diesel.
The Oil Companies Advisory Council (OCAC) has informed the Oil & Gas Regulatory Authority (OGRA) that it foresees “product availability challenges in various pockets of the country in days to come, due to inadequate imports and limited local availability.”
OCAC said motor spirit/petroleum and high-speed diesel (HSD) imports were finalized after extensive consultation and permitted to oil marketing companies (OMCs) in accordance with their demand in the product availability review for the month of November 2022. However, during the product review, a deficit of 210,000 MT of HSD and 147,000 MT of petrol was calculated. It was noted during the meeting that HSD imports in November could be difficult due to limited availability in the international market and extremely high premiums.
Many OMCs had October sales that were significantly higher than the anticipated demand and have been carrying low fuel stocks since October 2022. The OMCs obtained their shipments in the final week of the previous month, so the fuel was not available for use during the intended month. Similarly, the OMCs that were allowed imports the previous month for use the following month had already consumed the parcels in advance.
Petrol imports in proportion to expected sales volume and stock cover have also not been booked. OCAC argued the import plan should have been finalized by the importers, but there is currently a deficit in the import plan. This critical issue was also raised at last week’s meeting with industry representatives, but no firm commitments in writing have been received from the importing OMCs.
Alongside supply woes and inventory concerns, fuel demand has taken critical hits in the past few weeks as well. Overall petroleum demand in October was stagnant at 1.66 million tons, depicting a decline of 17 percent year-on-year (YoY). Petrol witnessed a fall of 11 percent YoY to settle at 0.68 million tons, while HSD volumes shrunk by 15 percent YoY, to arrive at 0.71 million in October.
