Pakistan - Petrol reserves only for four days

[riazishere]

The country’s oil refineries, which are running at 60 per cent of their production capacity, have been left with a meagre stock of petrol enough for four days, a senior official told The News.

“The refineries are not running at maximum capacity because of the fiscal constraints despite the fact that the government earlier arranged a sum of Rs 92 billion to minimise the adverse impact of circular debt in the energy sector. But still the remaining part of the debt has triggered fiscal constraints due to which it is unable to clear the dues of refineries.â€￾

In the face of the much lower production of petrol by Pakistaní refineries, the government is now compelled to import petrol.When contacted, Irfan Qureshi, Managing Director of Pakistan State Oil, refused to divulge any information. However, he acknowledged the fact that refineries were in lower production mode and the PSO will (today) Thursday open a tender for import of petrol.

However, the PSO is comfortable with stock of other main oil products, as the country has enough furnace oil stock, which is available for 17 days consumption and High Speed Diesel for nine days.

According to an official at the Ministry of Petroleum and Natural Resources, the Pakistan State Oil is now in deep water again as it needs to get Rs 15.9 billion from Wapda, Rs 15.6 billion from Kapco and Rs 2.7 billion from the Pakistan International Airlines. PSO has to pay the increasing bills piled up from the refineries.

“Hub Power Company, an IPP owes Rs 27.4 billion to PSO,â€￾ the official revealed. When asked as to why the PSO failed to retrieve its dues from Hubco as it is a private company, the official said under the Implementation Agreement (IA) with the government, Hubco is not bound to pay the dues to PSO unless Pepco clears the dues of Hubco.

The delay in clearing the dues has actually forced the refineries no to be operational at 100 percent production capacity. This issue is brewing which is why the smooth functioning of all the entities involved in the energy sector is being hurt again.

The government of Pakistan owes Rs 5 billion to PSO under the head of Price Differential Claims. The government is already in talks with the Asian Development Bank to resolve the issue of the remaining part of the circular debt and hopes to get $500 million to $1 billion to this effect on LIBOR+ 150 to 200 basis point.