Ogra probes 300,000-tonne fuel stock manipulation, issues notices to eight OMCs

The Oil and Gas Regulatory Authority (Ogra) is investigating the alleged manipulation of nearly 300,000 metric tonnes of petroleum stocks through offtake and inventory adjustments across six depots within a single week, The Express Tribune reported. 

The facilities under review include PSO Machike, GO Keamari, Attock Shikarpur, PSO Mehmood Kot and Rawalpindi depots, among others.

The Ogra has also issued show-cause notices to Fazaia Oil, Inam, Askar, Shell, Attock, Hascol, Flow and Puma for an alleged breach of the requirement to maintain more than 21 days of mandatory stocks. The companies collectively held around 47,000 metric tonnes of field inventory.

The regulator has deployed enforcement teams in different regions and asked district administrations to monitor storage facilities, retail outlets and field operations. The Ogra has inspected 1,922 filling stations under its anti-hoarding campaign initiated under the Oil Rules, 2016.

Supply pressures intensified after three vessels carrying 161,000 tonnes of petroleum products missed their scheduled arrival dates. Limited movement from bonded terminals connected to pipelines at Mehmood Kot, Faisalabad and Machike also contributed to the imbalance.

Restricted inflows of illicit fuel from Pakistan’s western borders and expectations of higher prices because of the US-Iran conflict further affected market conditions.

As a result, sales at leading OMCs increased between 14% and 68% compared with their planned July volumes.

Petrol sales were projected at 295,000 tonnes but reached 356,000 tonnes, exceeding estimates by 61,000 tonnes, or 21%. Average daily sales rose to 25,400 tonnes against a forecast of 21,000 tonnes.

High-speed diesel sales reached 329,000 tonnes against projected demand of 229,000 tonnes, a difference of 100,000 tonnes, or 44%. Daily sales averaged 23,500 tonnes compared with the estimated 16,000 tonnes.

Reported petrol stocks stand at 416,000 tonnes, sufficient for about 17 days at daily consumption of 25,000 tonnes. Diesel inventories total 463,000 tonnes, providing around 20 days of cover at a consumption rate of 24,000 tonnes a day.

Sources said vessels carrying another 204,000 tonnes were expected to arrive within 10 days, while ships carrying 42,000 tonnes had already berthed.

The government has directed refineries to increase petrol production during July and August and raise diesel output over the next 15 days to cover a production shortfall of 35,000 tonnes. Refineries have also been asked to purchase additional crude cargoes during July and August as national inventories decline.

Pakistan State Oil has been permitted to import additional petrol cargoes at the end of July and two high-speed diesel cargoes from Kuwait Petroleum in August to meet demand and rebuild stocks.

Papco, Parco and Pakistan Customs have been directed to clear pipeline-linked bonded stocks held by OMCs at the earliest. Oil marketing companies have also been instructed to monitor unusually high petrol and diesel sales at their retail outlets. 

However, officials said shipping through the Strait of Hormuz could remain challenging because of the regional conflict.