Pakistan: Expected Drop in Fuel Retail Price Creates Havoc

The Pakistan Petroleum Dealers Association (PPDA) an the Oil Marketing Companies (OMCs) have been monitoring the situation. There were long queues, especially motorcyclists, where petrol was available at the pumps. In fear of a looming petrol crisis, consumers tried to fill their tanks to the maximum level.

Pakistan Petroleum Dealers Association (PPDA) Chairman Abdul Sami Khan said the adviser to the prime minister on petroleum had already clearly stated that the price would not come down. But various ministers, who have nothing to do with the petroleum sector, had started issuing statements regarding a downward revision of petrol by Rs5 to Rs6 per litre ahead of the monthly price review. He said these statements compelled the panicky dealers to suspend purchases from the OMCs to avert losses on the stocks in their underground storage tanks. He added that the underground tanks had a storage capacity of 15,000 to 50,000 tons depending on the location and sales of the pumps.

Sources in the Oil Companies Advisory Committee, a body comprising members of local refineries and oil marketing companies, said petroleum dealers had not lifted petrol since Jan 29.

An official in the Pakistan State Oil (PSO), who asked not to be named, said the company, having a 71 per cent market share, was facing an additional burden due to the closure of pumps by other private sector OMCs. When asked why many PSO pumps were closed, he said the company had issued warnings to pump owners against creating an artificial shortage. The PSO had already imported about 75,000 tons of petrol since December 2008.

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