Oil marketing companies (OMCs) have reportedly implemented a quota system in the context of the current crisis.
ISLAMABAD:
The All Pakistan Petrol Pump Owners Association (APPPOA) on Wednesday sent a letter to Prime Minister Shehbaz Sharif, raising concerns over possible shortage of oil due to delays in fuel supply.
According to the letter, oil marketing companies (OMCs) have implemented a quota system in the context of the current crisis in the Middle East.
“Either they’re not supplying the product, or they’ve limited it to the point where we’re barely meeting the public’s needs, or the gas stations are drying up.”
APPPOA says orders are placed but will later be canceled as trucks remain stuck for long hours without obtaining the product.
“We understand the current global situation, but we would like the APPPOA to be taken into account when making decisions and to be properly communicated before imposing restrictions.”
The Petrol Pump Owners Association has warned that this artificial shortage could create panic among the public. They urged the government to immediately intervene and ensure that oil companies consult stakeholders before imposing restrictions.
The association also called for urgent measures to improve the supply of petroleum products and avoid any disruption to consumers.
No official response from the government or oil companies has yet been reported.
Oil for 28 days
The Oil and Gas Regulatory Authority (Ogra) said it has high oil stocks to meet the country’s consumption needs for 28 days, following preventive measures to import surplus fuel.
However, due to the war between the United States, Israel and Iran, two crude oil shipments are stuck after the Strait of Hormuz was closed. This canal is 33 km wide and passes through a fifth of the world’s oil.
Read: War in Iran: Pak plans to import oil via Red Sea
Last year, the Strait of Hormuz was used to ship an average of 20 million barrels of crude, condensate and fuel per day. OPEC members like Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq rely on this sea route to export most of their crude, mainly to Asia.
“We have sufficient stocks of gasoline and diesel to meet the country’s needs,” officials said, adding that the country could meet consumers’ fuel needs for 28 days.
However, reports have emerged that the government is considering importing oil via the Red Sea from Saudi Arabia and the United Arab Emirates (UAE) due to the closure of the Strait of Hormuz, while also moving to a weekly oil price review mechanism.
Sources said The Express PK Press Club that the government is currently working on various measures to ensure uninterrupted oil supplies amid the Iran-US-Israel war.
Pakistan imports around one million barrels of oil every month, with Saudi Arabia being one of the country’s largest oil exporters. The UAE also exports oil to Pakistan.
Sources said UAE-based ADNOC and Saudi Aramco would supply oil to Pakistan bypassing the Strait of Hormuz. A refinery has already imported some cargoes via the Red Sea. A few oil tankers have reached Pakistan, while others are on their way.
Strait of Hormuz
The ships received a VHF transmission from Iran’s Revolutionary Guards stating that “no ships are allowed to pass the Strait of Hormuz.” The Revolutionary Guards said Iranian forces had “full control” of the Strait of Hormuz, a vital route for global oil and gas supplies, and that any ships seeking to pass through it risked damage from stray missiles or drones.
The Strait of Hormuz is also nicknamed an 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, connecting the Gulf’s largest oil producers, such as Saudi Arabia, Iran, Iraq and the United Arab Emirates, to the Gulf of Oman and the Arabian Sea.
Around 20% of the world’s oil, including from producers in Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran, passes through Hormuz, as do large volumes of liquefied natural gas from Qatar.
Tehran has threatened for years to block the narrow waterway in retaliation for any attack on the Islamic Republic.
Fourteen LNG tankers showed signs of slowing down, turning around or stopping in or around the strait, said Laura Page of consultancy Kpler, who added that the number was likely to rise, posing risks for Qatari LNG exports.
