OMCs found guilty of hoarding petroleum products

ISLAMABAD: A fuel crisis committee probing the current shortage of petroleum products in the country has found some OMC’s guilty of hoarding petroleum products and has recommended taking strict actions against Oil Marketing Companies (OMCs) that have recently reported low or no sales. 

According to the fuel crisis committee’s interim report titled “Hoarding and black-marketing by OMCs”, strict measures should be taken against OMC’s in case of having low or no sales and a show cause notice should be issued to OMC’s not performing up to the mark.

According to the report, sales of OMC’s including Shell, Total Parco, Attock Petroleum, Byco, GO, Hascol and Puma Energy have dropped substantially and that necessary punitive action must be taken against them. 

The report further stated that marketing licences of OMC’s will be suspended if they failed to improve their performance within a period of one month.

The interim report further recommended that refineries need to ensure maximum production during June and July, so that overall supply chain equilibrium for petroleum products in the country can be maintained. 

The committee further pointed out that violation of regulations has been observed in terms of storage of petroleum products. “We have observed violations of safety rules and regulations i.e inter tank/gantry distance requirements for storing petroleum products and for storing highly combustible products at few of the private storage handling companies such as PMC, ATT, ATC, ZY and Co, Al-Noor,” said the report.

“Majority of these private terminals were initially designed to keep molasses, ethanol, and chemicals. Later on somehow they managed to convert their storage's into Premium Motor Gasoline (PMG) and High Octane Blending Component (HOBC) storage's, which is a big safety hazard in case of any mishap.”

Earlier, the Ministry of Energy (Petroleum Division) notified a committee to ascertain the element of hoarding and black marketing and to verify the availability of stocks in the depots of OMCs and their supply to retail outlets.

As per the terms of reference of this committee, the committee has to visit the depots, installations and retail outlets of OMCs and refineries to monitor supply of petroleum products to the petrol pumps and availability to the general public. 

The committee concluded that as per Oil Companies Advisory Council (OCAC) records, Pakistan State Oil (PSO) has significantly increased its market share from 35.7 per cent to 54.2 per cent, during the fuel crisis. It further ascertained that PSO’s terminals have been operational throughout the last two weeks. 

According to the interim report, Gas and Oil Pakistan Ltd’s (GO) petrol stock was at 54,000 metric tonnes (MT). During April, GO’s market share remained at 9.30 per cent to 14.0 per cent whereas it decreased to 11.2 per cent during June 1 to June 10. 

The report added that Hascol Petroleum Limited had sufficient stocks available with it and that it could have pushed the product in the market to ensure continuity of supply of petroleum products, however the company failed to do so and was hence found guilty of product hoarding.

According to the report, PUMA Energy imported 3,000 MT of stock on May 27. The company dispatched 2,800 MT of petrol from May 27 to June 8. However, PUMA did not proactively, ex-bond their import consignment of 5,000 MT petrol  (received on 6th June) to dispatch the product. 

Hence the company was found guilty of hoarding the product and not supplying to its retail network and general public. 

Earlier on Thursday, Prime Minister (PM) Imran Khan stated that shortage of petroleum products in the country will not be tolerated at any cost. 

Going through the Ministry of Petroleum’s report on the recent fuel shortage, the prime minister issued directives for the authorities to take measures to avert any artificial petroleum shortage in the future. He called for oil companies to ensure a smooth supply of petroleum products and ordered action against hoarders.

Last week, the prime minister had ordered punitive action against those responsible for the artificial shortage of fuel across the country.