Govt considering imposing levy to expand POL storage capacity

Islamabad: The government is mulling to impose a levy on the sale of all transport fuels, which would help improve the storage infrastructure in the country.

This move is being considered due to strategic defence requirements for stockpiling petroleum products which was recommended by a high-level committee on strategic planning for oil and gas which included officials from the army, federal govt and private sector.

A surcharge of 10 paisa per litre is being pondered but no decision in this regard has been made, said an official. And the official further added, that no official summary had been sent in this regard to the Economic Coordination Committee (ECC) or federal cabinet.

The plan is to enforce a prerequisite of keeping petroleum and oil reserves for 45 days at any given time for strategic purposes or in event of war. The armed forces are responsible for maintaining 20 days of fuel stocks and the other 25 days have to be guaranteed by the petroleum ministry to be maintained via oil marketing companies (OMCs).

The military is said to be keeping its due share of 20 days of fuel stocks and has told the petroleum ministry to ensure any shortfall is compensated when OMC’s are unable to top up the reserves.

In this regard, the government has been told by the defence authorities to make it a prerequisite for all OMCs to keep 25 days of stocks for the military at 22 assigned depots. And every two weeks, a stock take should be carried out and details given to the defence authorities.

Diesel storage capacity is said to be more than 45 days, but as per officials it is a cause for alarm that the stockpile of petrol is significantly lesser than what is actually needed.

Entire storage capacity excluding stocks which includes oil companies, institutions, refineries and pipeline have a coverage of maximum 19 days for petroleum production in normal circumstances.

All oil and gas companies have been instructed to formulate a plan for undertaking work to take all transmission and distribution underground and also been advised to disguise sensitive pipelines and installations.

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