The Ministry of Petroleum and Natural Resources misled the economic managers about the oil stocks, leading to unprecedented petrol shortage in Punjab.
According to a report on Sunday, the Petroleum Ministry had informed the Economic Coordination Committee (ECC) in its meeting on January 10 that the country’s oil stocks on an average were enough for 18 days of consumption on January 6.
However, Punjab started facing petrol shortages soon after the ECC meeting. Within days, the situation worsened and petrol stations ran dry with people scrambling to purchase whatever fuel was available at the filling stations.
Pakistan State Oil (PSO) said efforts to cope with the surge in petrol demand were impeded by Pakistan National Shipping Corporation (PNSC), which supplied vessels for the transport of fuel later than the agreed time. A vessel bringing in 52,000 tons of petrol was to be provided for loading on January 2-4, but it arrived on January 10. Similarly, another vessel, which was due to arrive at the loading port on January 5, reached on January 15.
Officials of the petroleum ministry said besides the rise in demand the default on payments for furnace oil had also impacted PSO’s ability to import white oil products including petrol as the company was unable to open fresh letters of credit (LCs) before the clearance of outstanding payments.
On an average, PSO imports four cargoes of petrol of 50,000 tons each every month. In January, however, only one cargo was imported on the 15th and another was expected to be imported at the end of the month.
PSO’s current receivables stand at approximately Rs 200 billion. Out of the total, Rs 176 billion is owed by the power sector.
The breakdown of receivables shows WAPDA has to pay Rs 99.3 billion, Hubco Rs 57.9 billion, Kapco Rs 13.6 billion, K-Electric Rs 3.8 billion and Saba Electric and Southern Electric Rs 579 million.
SOS letters were repeatedly written to the Ministry of Petroleum and Natural Resources as well as the Ministry of Water and Power outlining the PSO’s critical situation. The company defaulted on the payment of Rs 46 billion against the LCs, which resulted in consumption of the company’s credit lines and overdraft limits. Consequently, banks cut PSO’s credit lines, which meant that the company was no longer able to open the LCs.
PSO sought the release of Rs 74 billion on an urgent basis by December 31, 2014 to honour the commitments made to local and international suppliers. The state oil marketing company also had to bear penalties of approximately Rs 250 million on account of delayed payments to banks along with demurrage charges of $1.8 million and supplier’s claim of $6.4 million due to delay in opening the LCs.
PSO informed the government that due to delay in payments by the power sector, the company was unable to import fuel cargoes or continue supplies to the power sector.
On an average, PSO imports three to four cargoes of furnace oil of 65,000 tons each per month.
In January, no cargo of furnace oil was imported and only one cargo was brought in December. As PSO has no furnace oil stock, the government has issued directives that Hubco will now purchase furnace oil from Byco on advance payments with PSO acting as the middleman.
that is called " good governance ". That is why Allah swt says " never talk big "….but our leaders cannot live without ego & arrogance & that is what have hit them in their own home ground….
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