RECORDER REPORT

ISLAMABAD ( 2008-11-22 04:35:07 ) :The government has turned down the request of Pakistan State Oil (PSO) to import petrol to overcome the shortage in the country, sources said here on Friday.

Sources in Petroleum Ministry told Business Recorder that PSO informed the government that its stock were going dry out by the end of current month due to low production of oil refineries, and sought the permission to import 25,000 tons of petrol to meet the country's requirements, but the government had turned down the demand.

The government conveyed to the PSO administration that oil refineries would provide the petrol to PSO, the sources said. According to PSO sources, it has stock of petrol with a supply of five to six days only and there would be no petrol after a week if oil refineries failed to provide petrol to the PSO.

During the first 10 days of November, the sale of petrol by PSO was 22, 540 metric tonnes that accounted for 67, 620 tonnes for the whole month of November. The PSO earlier projected a sale of 60,000 tonnes for current month and it had written a letter to the Petroleum Ministry to allow the import of 25,000 tonnes of petrol.

The sources said the government was looking towards the oil refineries for the petrol import that were already under pressure of depleting oil stocks. The PSO recently claimed that it had stocks of five to six days only, and said if the government allowed the import of petrol, it would take around 15 days to reach Pakistan and if oil refineries failed to provide petrol, the government would not be able to arrange petrol in case of emergency.

Sources said that oil refineries were importing crude oil, and added that due to poor rating, oil refineries of Pakistan were facing problems to open letter of credit (LC). Biscor's import of crude oil will reach on November 23-24 that would also take time in refining and the import order of the other oil refineries were not in a huge quantity.

Due to financial crunch, these oil refineries had placed order that were in lower quantity and would not provide relief. These refineries had stock for seven days from Thursday and now the government was depending on the refineries that were already facing problems of stocks, sources said, adding these refineries had dropped refining capacity to 70 percent due to financial problems.

Another member from the multinational oil company also confirmed that they had the stock of petrol for five to six days' requirements and they were not receiving petrol from the oil refineries. He said that oil refineries had dropped their refining capacity by 50-60 percent.

The PSO said it had been pointing out towards this situation since September, and added that unless some immediate measures were taken to address the situation, it was clear that Premier Motor Gasoline (PMG) stocks would dry out by the end of current month. When contacted, acting Petroleum Secretary G. A Sabri said that there were no shortage of petrol and oil refineries were providing petrol to PSO for the country's requirements.



Copyright Business Recorder, 2008