Action taken against OMCs for accumulating oil

Action taken against OMCs for accumulating oil

Prime minister aide on petroleum, Nadeem Babar said on Saturday that Oil Manufacturing Companies (OMCs) and many petrol pumps have been stocking up oil while expecting an increase in the oil prices. He also said that there is enough evidence to prove it.

If the OMCs statistical data of first ten days of June of the current year is being compared with the same period of the last year then there’s an increase of 52 per-cent and the average sales until now is 32-33 per-cent which is higher then June 2019. It was unlikely that the dissipation had elevated over last year, he said.

While doing a press briefing with the federal minister of power and petroleum Omar Ayub Khan he said that, “This means that a major part of oil was going towards hoarding.”

According to the adviser, since the cost of oil was continually rising in the global market and the prices of oil in Pakistan were relatively low, so the OMCs started reserving the oil to make gain profits.

We should develop policies to restrain from such utilization in future, and the government is also working to organize the supply chain. It is also working to make sure that the regulator is powerful enough to execute rules, he said.

The three improvements that are needed to stop the crisis are to seal illegal petrol pumps and to cancel the licenses of those companies which don’t have stock for 21 days. Moreover, imposing automation systems at storage depots of the oil companies and petrol pumps so that their sales data will be available to the Oil and Gas Regulatory Authority (OGRA), he further told.

Currently, there are 9000 legal and 1500 illegal petrol pumps. These illegal petrol pumps are also used for keeping stock of oil. The list of the registered petrol pumps has been taken from the OMC and is given to each province district administrations, said Mr Babar.

He said that it is noticed that the OMCs were keeping stock of the oil but not providing it to the petrol pumps.

He further said that the elimination of hoarding and illegal petrol pumps would be the solution of the petrol shortage.

Petroleum Minister said that due to the global hike in the oil price which increased by 112% the government had to increase the oil prices in Pakistan which is still lower than the prices in other Asian countries. In Pakistan, the oil price is Rs.100 per litre; however, in Bangladesh and China, the price is Rs.138 or more than that.

Similarly, when the oil prices were low in the global market, the government reduced it. The government has not imposed new taxes on petroleum products. It is assumed that the procedure will go with variation, he said.

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