ISLAMABAD: Pakistan’s oil industry has urged the government to take immediate steps to discourage fuel hoarding after the country’s petrol stocks fell to a 14-day cover, raising concerns over potential supply disruptions amid rising international oil prices triggered by renewed US-Iran tensions.
The issue was reviewed during an emergency meeting of the National Coordination and Management Council (NCMC), the recently established civil-military body overseeing energy supplies. The meeting, chaired by Minister for Economic Affairs Ahad Khan Cheema with Lt Gen Zafar Iqbal as co-chair of its executive committee, assessed petroleum product availability across the country.
According to officials, petrol consumption has surged significantly over the past three weeks following recent price reductions. During the first half of July, petrol sales increased by 18-20% year-on-year, while high-speed diesel (HSD) demand rose by around 40% compared to the average July consumption over the past five years. The increase also reflects a decline in smuggled fuel inflows from Iran as the price gap narrowed.
Industry sources said the cancellation of two planned Pakistan State Oil (PSO) petrol import cargoes—after failing to secure clearance from the NCMC during a period of falling global oil prices ahead of the temporary US-Iran peace agreement—also contributed to the decline in inventories. Subsequent regional tensions pushed import premiums sharply higher, with PSO’s latest petrol cargoes attracting premiums of around $25 per barrel compared to about $12 per barrel just 10 days earlier.
Market estimates suggest petrol prices could increase by Rs10-12 per litre, while diesel prices may rise by Rs40-42 per litre, creating incentives for dealers to increase purchases and encouraging hoarding in anticipation of higher prices.
At present, petrol stocks stand at approximately 345,000 tonnes against daily consumption of around 25,000 tonnes, providing a cover of about 14 days. Local refineries are producing only around 9,000 tonnes of petrol per day. Meanwhile, diesel stocks are estimated at 465,000 tonnes—equivalent to a 21-day cover—with local refineries supplying nearly 16,000 tonnes daily against demand of about 23,000 tonnes.
The Oil Companies Advisory Council (OCAC), representing more than three dozen oil marketing companies and refineries, warned the government of emerging supply chain challenges and called for immediate action.
Following the meeting, the NCMC stated that the concerns raised by the industry had been reviewed and addressed. The council noted that the unusual increase in petroleum sales during the first 15 days of July, coupled with analysis by the Oil and Gas Regulatory Authority (OGRA), pointed to possible hoarding in anticipation of price increases.
The council directed OGRA to strengthen its enforcement efforts and urged provincial governments to take proactive measures to prevent hoarding and ensure uninterrupted availability of petroleum products across the country.
The meeting was attended by Petroleum Minister Ali Pervez Malik, representatives of oil marketing companies and refineries, officials from the Oil Companies Advisory Council, the Federal Board of Revenue (FBR), OGRA, and other relevant stakeholders.
The NCMC reiterated that petroleum stocks remain sufficient to meet national demand and instructed all stakeholders to maintain uninterrupted fuel supplies. Customs authorities also assured the meeting that clearance bottlenecks affecting petroleum shipments would be resolved without delay.
Earlier, the OCAC had urged the government to immediately release nearly Rs67 billion in outstanding Price Differential Claims (PDCs), warning that delayed payments and customs clearance issues were restricting the availability of saleable fuel stocks. The council cautioned that continued delays could lead to localized shortages, particularly in upcountry regions.
Story by Khaleeq Kiani
