ISLAMABAD: Oil and Gas Regulatory Authority (OGRA) has asked Pakistan State Oil (PSO) to reassess the contractual quantities of HSD locked in with Kuwait Petroleum Company (KPC) as surplus HSD stock available in the country.
In a letter to Director General (Oil), Senior Executive Director (OSC) has stated that the government should correct the stock levels reported by the refineries on August 30, 2024. The OCAC daily fact sheet reports 759,256 M tons’ diesel stock as on August 30, 2024, instead of 770,000 metric tons reported by refineries that too inaccurately includes 94,443 metric tons of line fill, which is not available for sale. The correct figure, the actual stock of High-Speed Diesel (HSD) as of August 30, 2024, stands around 664,813 metric tons, sufficient to meet 44 days of national demand. In this regard, PAPCO has been advised for correction in their reporting sheet.
OGRA has further stated that the sales, imports, and production estimates and plans are finalized during the Product Review Meeting (PRM) with careful consideration of multiple variables. These measures are meticulously designed to build resilience into the National Oil Supply Chain. However, estimates can vary, necessitating continuous monitoring and adjustments to the plans when there are material changes in the underlying assumptions. In light of the current situation, OGRA has taken the following corrective actions, aimed at easing the pressure on the refineries.
According to OGRA, M/s GO, which was advised to reroute its cargo or hold it at the outer anchorage until the last week of September, is now being advised to keep its product in bonded storage until the third week of September 2024. This measure is aimed at easing the pressure on the refineries and for avoiding demurrage costs.
On rationalisation of imports, OGRA has argued that PSO has deferred its one Cargo of 55,000 M tons for September, 2024 and is also considering reviewing the December plans.
Imports for October will be reviewed/ rationalised in the meeting convened on September 4, 2024. It is crucial to highlight that PSO is currently holding an inventory of diesel, approximately 336,000 metric tons, constituting 50% of the total stocks. Rule 35(g) applies across the board, regardless of the size of the company or group. However, PSO is bound by its government-to-Government agreement with KPC to purchase a minimum of 1.8 million tons of HSD/annum.
OGRA has advised that given the current demand scenario and the ingress of smuggled products, PSO must reassess the contractual quantities locked in with KPC, hoping that the situation starts getting better in view of the aforesaid actions.
