Oil marketing companies (OMC) have reportedly implemented a quota system amid the ongoing crisis
ISLAMABAD:
The All Pakistan Petrol Pump Owners Association (APPPOA) addressed a letter to Prime Minister Shehbaz Sharif on Wednesday, raising concerns over a potential petroleum shortage as delays in fuel supply occur.
According to the letter, oil marketing companies (OMC) have reportedly implemented a quota system amid the ongoing Middle East crisis.
“They are either not providing the product or have limited it to such an extent that we hardly fulfil the need of the public, or fuel stations get dry.”
The APPPOA states that orders are placed but then will be subsequently cancelled, with lorries getting stuck for long hours without procuring the product.
“We understand the current global situation, but we would like APPPOA to be taken onboard while making any decisions and communicated properly before imposing any restrictions.”
The Petrol Pump Owners Association warned that this artificial shortage could create panic among the public. They urged the government to intervene immediately and ensure that oil companies consult with stakeholders before imposing any restrictions.
The association also called for urgent measures to improve the supply of petroleum products and prevent disruption to consumers.
No official response from the government or oil companies has been reported yet.
Oil for 28 days
The Oil and Gas Regulatory Authority (Ogra) has said that they have high stocks of oil to meet 28 days of consumption requirement of the country, following pre-emptive measures to import surplus fuel.
Owing to the US-Israel and Iran war, however, two cargoes of crude oil have been stuck after the closure of the Strait of Hormuz. This channel is 21 miles (33 km) wide and a fifth of the world’s oil passes through it.
Read: Iran war: Pak plans to import oil via Red Sea
The Strait of Hormuz was used to ship an average of 20 million barrels of crude, condensate and fuel per day last year. OPEC members like Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq depend on this shipping lane to export most of their crude, mainly to Asia.
“We have ample stocks of petrol and diesel to meet the country’s requirement,” officials said, adding that the country could meet the fuel needs of consumers for 28 days.
However, reports have emerged that the government has planned to import oil through the Red Sea from Saudi Arabia and the United Arab Emirates (UAE) due to the closure of the Strait of Hormuz, while also shifting to a weekly oil price review mechanism.
Sources told The Express Tribune that the government is currently working on various measures to ensure an uninterrupted oil supply amid the Iran-US-Israel war.
Pakistan imports around one million barrels of oil on a monthly basis, with Saudi Arabia being a key oil exporter to the country. The UAE also exports oil to Pakistan.
Sources said that UAE-based firm ADNOC and Saudi Aramco will supply oil to Pakistan by bypassing the Strait of Hormuz. One refinery has already imported a few shipments through the Red Sea. A couple of oil vessels have reached Pakistan, while others are en route.
Strait of Hormuz
Vessels have been receiving VHF transmission from Iran’s Revolutionary Guards saying “no ship is allowed to pass the Strait of Hormuz”. The Revolutionary Guards said Iranian forces had “complete control” of the Strait of Hormuz, a vital route for world oil and gas supplies, and any vessels seeking to pass risked damage from missiles or stray drones.
Strait of Hormuz also dubbed as energy corridor as millions of barrels of oil move from one part to another from here. PHOTO: REUTERS
The strait is the world’s most vital oil export route, which connects the biggest Gulf oil producers, such as Saudi Arabia, Iran, Iraq and the United Arab Emirates, with the Gulf of Oman and the Arabian Sea.
Some 20% of global oil, including from producers Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran, passes through Hormuz along with large volumes of liquefied natural gas from Qatar.
Tehran has for years threatened to block the narrow waterway in retaliation for any attack on the Islamic Republic.
Fourteen LNG tankers have shown signs of slowing down, U-turning or stopping in or around the Strait, said Laura Page from consultancy Kpler, who added the number will likely rise, posing risks to Qatari LNG exports.
