Petrol reserves sufficient for 27 days, diesel for 21: petroleum secretary tells Senate committee

The standing committee, chaired by Senator Manzoor Ahmed, was meeting after the government announced a Rs55 per litre hike in the prices of both petrol and high-speed diesel in response to tensions in the Middle East.

The secretary added that jet fuel (JP1) reserves were available for 14 days, crude oil reserves for 11 days and liquefied natural gas (LNG) reserves for nine days.

Additionally, he informed the committee that the import of oil of quality below Euro 5 standard had now been allowed.

Sheikh said that 70 per cent of Pakistan’s petrol comes from the Middle East, and due to the suspension of ship movements affecting supply, prices have increased.

The price of high-speed diesel rose from $88 to $187, while petrol increased from $74 to $130, he added.

“A ministerial committee formed by the prime minister reviews the situation of petroleum products on a daily basis,” Sheikh told the meeting, adding that the government was trying to increase the use of existing reserves.

Senator Manzoor Ahmed said that the “entire benefit was passed on” to oil marketing companies. In response, the petroleum secretary said that the price hike had been adopted to stop the hoarding of petroleum and this “did not benefit oil marketing companies”.

Oil marketing companies continued to import despite the increase in prices, he added, saying that the move had “affected oil marketing companies across the country”.

Asked by Senator Hidayatullah about petroleum product prices before March 7 and the extent of their increase, Ogra officials said that diesel prices had risen by 100pc, while petrol had increased by 70pc.

The petroleum secretary added that “the government is working on a package to provide relief to motorcycles and rickshaws” and that they have taken measures which would “provide relief to the people”.

“60pc of India’s petrol imports have been affected … All countries are trying to ensure the safe supply of petrol,” he said, adding that two of Pakistan’s ships were also stuck in the Strait of Hormuz.

Officials said that there were two agreements in place for importing LNG from Qatar.

“LNG supply from Qatar has been completely stopped since March 2,” Ogra officials said. “Eight cargoes were scheduled to arrive in March, of which only two arrived, while six cargoes are expected in April.”

The officials added that Sui Southern Gas Company had cut gas supply to a fertiliser plant by 50pc, and gas supply to the power sector had been reduced from 300 million cubic feet per day (MMCFD) to 130 MMCFD.

Officials said LNG would not be available in the country after April 14, and the power sector’s gas requirements would not be met in April, adding that “the sector’s needs will be met from other sources”.

They further said that gas would be supplied to domestic consumers, while LNG could be purchased from the State Oil Company of the Azerbaijan Republic (Socar). However, spot purchases would cost $24 per unit, while gas from Qatar is available at $9 per unit. “This will make electricity more expensive,” they added.

On Sunday, the government also increased the price of kerosene oil by another Rs40 per litre and approved a Rs23 billion price differential subsidy for payments to oil marketing companies to keep the prices of petrol and high-speed diesel (HSD) unchanged for the current week.

Last week, Prime Minister Shehbaz Sharif announced that petroleum prices would remain unchanged for the current review period, stressing that the decision was aimed at easing the fin­ancial burden on the public.