ISLAMABAD: As the political tug of war in the country has further intensified, the Oil Companies Advisory Council (OCAC) has forewarned the government and oil companies of possible shortage of diesel in Pakistan after decline in its reserves in the country and record high global prices.
The council has informed the government and oil companies that only five days stock of diesel had been left in Pakistan.
A couple of weeks ago, the crude oil prices in the international market hit the record high $126/barrel which discouraged oil imports.
However, the crude oil prices have crashed today following UAE’s appeal to OPEC to increase output and Russia-Ukraine fresh talks to find a way out of the ongoing war.
Before this war, the crude oil price was hovering around $94/barrel, but soon after Russian invasion of Ukraine, the price inflated to record high $126 per barrel before crashing to $109/barrel (Brent oil) on March 14, 2022 (Monday), while OPEC crude oil has dropped to $116/barrel.
Sensing oil shortage, the OCAC had also written a letter to the Governor State Bank, urging him to intervene in this matter as banks were reluctant to open oil companies’ LCs for imports.
The Pakistan State Oil (PSO) – the state-run oil marketing company — has informed the energy ministry about the situation in a letter sent to the director general oil.The company pointed out that oil marketing companies (OMCs) had defaulted in oil imports, especially high-speed diesel (HSD), from December to March because of the Russia-Ukraine war. The PSO said it had resulted in a shortfall of 205,000 metric tons of diesel imports from January to March 2022.
Meanwhile, the United States and Europe have also reported decline in their stocks of diesel oil.
According to the US Energy Information Administration, distillate fuel oil inventories in the US fell by 21% to 30 million barrels, below the pre-pandemic five-year seasonal average and at the lowest level since 2005.
The stock of diesel in Europe also fell by 8% to 35 million barrels — below the pre-pandemic five-year average at the lowest level since 2008.
