Pakistan Government Cracks Down on Fuel Hoarding Amid Declining Petrol Stocks

The NCMC, a civil-military body chaired by Minister for Economic Affairs Ahad Khan Cheema and co-chaired by Lt Gen Zafar Iqbal, convened an urgent session with oil industry representatives to review petroleum availability. An official statement noted that the council urged provincial governments to ensure products remain available to the public without inconvenience.

Petrol and Diesel Inventory Figures

Current data shows a significant gap between local refining capacity and daily demand for petrol. According to the NCMC, petrol consumption is approximately 25,000 tonnes per day, while local refineries provide only 9,000 tonnes per day.

Diesel supplies are more stable, with a cover of approximately 21 days. High-speed diesel (HSD) stocks are estimated at 465,000 tonnes against a daily consumption of 23,000 tonnes, with local refineries contributing 16,000 tonnes per day, according to the report.

Consumption Surges and Hoarding Risks

Petrol consumption rose 18-20 per cent year-on-year during the first half of July, while diesel demand increased by roughly 40 per cent compared to July figures from the previous five years. Informed sources told Dawn that this trend indicates a drop in smuggled fuel from Iran, as the price gap between legal and smuggled fuel narrowed.

Ogra analysis presented during the NCMC meeting indicated that some of the abnormal sales increases in early July may be due to hoarding.

Import Costs and PSO Cargo Delays

Pakistan State Oil (PSO) faced supply disruptions after the NCMC blocked two planned import cargoes. These cargoes were cancelled when global prices fell ahead of an interim US-Iran peace agreement. However, subsequent tensions caused import premiums to spike.

According to informed sources, PSO’s two most recent petrol cargoes carried premiums of approximately $25 per barrel, a sharp increase from the $12 premiums seen 10 days prior.

Oil Marketing Company Claims and Customs Bottlenecks

The Oil Companies Advisory Council (OCAC), representing over three dozen refiners and oil marketing companies (OMCs), warned the government of a looming supply chain crisis. The OCAC demanded the immediate payment of approximately Rs67 billion in Price Differential Claims (PDCs).

Smaller industry players have expressed reluctance to increase supplies while these claims remain pending. The OCAC further reported that customs clearance bottlenecks have rendered a portion of existing stocks unavailable for sale, which reduces the actual saleable inventory.

Under the prevailing circumstances, any further delays in customs clearance could materially impact product availability and increase the likelihood of localised shortages, especially in upcountry locations

Oil Companies Advisory Council (OCAC)

In response to these concerns, customs authorities promised the NCMC they would remove clearance challenges immediately. The meeting was attended by Petroleum Minister Ali Pervez Malik, FBR Member Customs, and representatives from Ogra and the OCAC.

The government is currently reviewing the regional situation to determine if it must revert to fuel conservation measures used over the previous two months.