ISLAMABAD: Pakistan State Oil (PSO) officials have forewarned the Senate Panel about the looming crisis of diesel and petrol in the country.
In a meeting of Senate’s panel today, the representatives of the oil companies said the government does not pay them amount of subsidy on time, hence smaller petroleum companies can face petrol and diesel shortage.
The crisis allegedly stems from Prime Minister Imran Khan’s announcement to reduce petrol and diesel prices by Rs10 per litre. As crude oil prices went up in the international market after the Ukraine war, the government decision to sell petrol and diesel at lower rates meant oil companies would be buying petroleum products at higher prices and selling them to consumers at less than that of their purchase prices.
The gap was to be filled by government subsidy, but government usually takes a long time to transfer the subsidy money to the companies, according to industry sources. Until the money is transferred, oil companies would consider the gap as their loss.
The PSO officials told Senate Standing Committee on Petroleum that although the PSO has 26-day stocks left, they feared that smaller companies would stop the supply citing losses.
The officials said that oil companies are incurring more losses on diesel which has seen a price hike in the international market after the Russian invasion of Ukraine.
Senator Abdul Qadir, who heads the Senate panel on petroleum affairs, said that every other oil company in Pakistan is warning of shortage.
He advised the concerned officials to hold back-to-back meetings to resolve the issue.
Earlier this week, Federal Energy Minister Hammad Azhar had ruled out the possibility that Pakistan could face diesel crisis, saying that newspapers reports claiming only five days of stocks were left were “fake and contrary to the fact.”
