The federal government in a bid to minimise loss of foreign exchange and misuse of inland freight equalisation margin (IFEM) has directed the oil marketing companies (OMCs) to ensure the sale of domestic petrol before placing orders for the imported product, reported a local news outlet.
Leading OMCs are resorting to import orders for short-term gains, not taking into account the impact their actions have on the countries foreign exchange reserves and consumers, said some senior government officials.
In October last year, the government banned import of furnace oil to ensure maximum utilisation of imported liquefied natural gas (LNG) forcing refineries to scale down capacity utilisation because of topped up storage tanks.
OMCs are allocated import quotas on a monthly basis to make up for the demand beyond domestic production, keeping in mind the upliftment of petroleum products at local refineries.
The Ministry of Energy in a terse order issued a few days ago to the Oil Companies Advisory Council (OCAC) directed the local OMCs to uplift products from local refineries as per agreed volumes.
Byco Refinery Limited and Attock Refinery Limited (ARL) have complained about short upliftment by the OMCs. ARL alleged that the OMCs despite availability of its product were moving imported petrol into the country.
ARL has warned that in such a situation, it would have to reduce capacity utilisation, which would not only impact production of petroleum products, but would also hamper crude intake from production and exploration companies, reported the local news outlet.
