The Oil and Gas Regulatory Authority (Ogra) has approved the import of two cargoes of high-speed diesel (HSD) by Pakistan State Oil (PSO) for June, rejecting a similar request from Gas & Oil Pakistan Ltd (GO), following a recent review of supply and demand for petroleum products, particularly HSD, where PSO had initially sought permission to import 145,000 metric tonnes (MT) of HSD under its long-term contract with Kuwait Petroleum Corporation (KPC).
However, refinery representatives argued that local production would suffice to meet the demand, deeming additional imports unnecessary. After discussions, Ogra approved the import of 95,000 MT.
GO, a private-sector oil marketing company with significant backing from Saudi energy giant Aramco, requested approval to import 78,000 MT of HSD. However, Ogra rejected the request, citing the adequacy of local supply.
Currently, Pakistan holds about 550,000MT of HSD in stock, with daily consumption around 22,000MT. Given that the harvesting season has ended, the demand for diesel has fallen, leading to a seasonal dip. “June typically sees a slump in HSD demand,” an official said. “Local refineries are expected to meet the demand in the coming month without the need for additional imports.”
In the first ten months of the current fiscal year, Pakistan imported 1.7 million tonnes of HSD, with 246,000MT brought in during April due to increased demand for agriculture. However, with the end of the harvest season, Ogra has limited further imports, approving only a reduced quantity for PSO.
Tensions have been rising between refineries and oil marketing companies (OMCs) regarding product offtake and import strategies, especially for HSD. These ongoing disputes have prompted the government to consider implementing a legal framework to establish binding agreements between OMCs and refineries.
