Subsidised fuel scheme on the cards for bikes, rickshaws

ISLAMABAD: The federal government has planned a subsidised fuel scheme for motorcyclists and rickshaw drivers to cushion the impact of a massive hike in oil prices, following a similar move by the Khyber Pakhtunkhwa government.

“The government is working on a package to provide relief to (owners of) motorcycles and rickshaws,” said newly appointed petr­oleum secretary, Hamed Yaqoob Sheikh, while testifying before the Senate Standing Committee on Petroleum on Monday.

He claimed that the government had taken measures which would “provide relief to the people”. On Sunday, the government increased the price of kerosene oil by Rs40 per litre and approved Rs23 billion for oil marketing companies, as it kept the petrol and high-speed diesel prices unchanged for the current week. Earlier this week, there was a Rs55 hike in the price of petrol due to the Iran war.

Mr Sheikh told the Senate panel chaired by Senator Manzoor Ahmed that Pakistan had sufficient petrol reserves for 27 days and diesel reserves for 21 days. 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. The Senate panel was also informed that the government had allowed the import of oil that falls short of the Euro 5 standard.

Mr Sheikh said that 70 per cent of Pakistan’s petrol comes from the Middle East, adding that the price of high-speed diesel rose from $88 to $187, while petrol increased from $74 to $130 due to the Strait of Hormuz blockade.

Meanwhile, a petrol monitoring committee led by Finance Minister Muhammad Aurangzeb noted the country’s fuel availability for March was fully secured, while coverage was available up to mid-April based on current cargo planning and supply arrangements. Efforts were underway to extend coverage further towards the end of April, the ministerial committee noted.

“Overall stock levels and scheduled imports indicate that the country maintains comfortable inven­tories of crude oil and key petroleum products for Mar­ch, with sufficient planning in place to ensure continued availability during April,” said a statement issued after the meeting.

The meeting was informed that procurement strategies were already moving towards greater diversification, with efforts underway to broaden sourcing from the international market and reduce reliance on any single corridor.

The minister noted that the current stock position and supply outlook remain stable and that, based on the reports presented, there was no basis for panic buying or unnecessary stockpiling of fuel.

The meeting directed the relevant authorities, in coordination with the Oil and Gas Regulatory Authority (Ogra) and the provincial governments, to closely monitor stock levels and market activity to deter hoarding.

During the Senate committee meeting, Senator Manzoor Ahmed alleged that the “entire benefit was passed on” to oil marketing companies, while following the international price increase, consumers were charged high prices on stocks that had already been purchased.

In response, the petroleum secretary said that the price was hiked to stop hoarding, adding that this “did not benefit oil marketing companies”. He said oil marketing companies continued to import despite the increase in prices, adding 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 diesel prices had risen by 100pc, while petrol had increased by 70pc.

“Sixty per cent of India’s petrol imports have been affected … All countries are trying to ensure the safe supply of petrol,” Secr­etary Sheikh 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 LNG imports from Qatar but “LNG supply from Qatar had been completely stopped since March 2”. “Eight cargoes were scheduled to arrive in March, of which only two arrived, while six cargoes were expected in April” but their arrival was uncertain.

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 was available at $9 per unit. “This will make electricity more expensive,” they added.