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ISLAMABAD: Three Oil Marketing Companies (OMCs) have sought three-day extension from the Oil and Gas Regulatory Authority (Ogra) to explain their position in person against the show-cause notices issued to them over artificial shortage of petrol and High-Speed Diesel (HSD) in the country.

Source said that three OMCs submitted their responses in writing to the Ogra over their alleged involvement in shortages of petroleum products in the country.

The Ogra on Wednesday (June 3) found six mega OMCs involved in prevailing shortage of petroleum products across the country besides suggested Petroleum Division to call an urgent product review meeting (PRM) to review integrated system like stock, import and local production.

The six OMCs, the Attock Petroleum Limited (APL), Shell Pakistan Limited, Total Parco Pakistan Ltd, Hascol Petroleum Ltd, Gas and Oil Pakistan and Puma Energy Private Ltd were found involved in shortage of petrol across the country out of 33 OMCs, and were issued show causes notices.

The authority has sought reply within 24 hours.

In case, the OMCs failed to comply with the directives of the regulator, the authority may revoke their licenses and punish with fine, which may extend to Rs10 million, and in case of continuing contravention with a further fine, which may extend to Rs1 million for every day during which such contravention continues.

However, the authority extended three more days to three OMCs to respond to the show causes in person.

The Petroleum Division is in contact with all OMCs and most OMCs do not have any major shortages.

Shell Pakistan Ltd and Total Parco Ltd are low on stocks but their additional imports are arriving on 8-10 June after which, their stocks will also be replenished, the Petroleum Division stated on Friday.

Spokesman Ogra Imran Ghaznavi states, "Through joint efforts of Ogra and Ministry of Energy Petroleum Division prevailing oil shortage will be normalized. Hoarding, price manipulation, rationing will not be tolerated and dealt according to law. Sufficient stocks of HSD and petrol are available in country and more shipments are coming."

He said that district management through the chief secretaries had been advised to check availability of adequate stocks at retail outlets in their regions.

Panic buying of petrol and HSD has further worsened the situation in various regions, where artificial shortage of petroleum products is reported.

All Pakistan Petroleum Retailers Association alleged that the government failed to ensure present demand of 25,000 MTs per day of petrol, since announcement of reduction in petrol price on May 31, across the country.

At present oil marketing companies have stopped supply to petrol pumps, while filling stations are getting reduced supplies, which are not enough to satisfy the demand of consumers resulting in serious problems, Ghiyas Paracha founder member of the association told Business Recorder.

The Petroleum Division accused the OMCs and petrol dealers of the artificial shortage of POL products in the country.

The Petroleum Division emphatically states that there is sufficient quantity of petrol stocks in the country.

Additional production by refineries as well as planned imports are on schedule to meet the monthly needs.

The useable stocks of 272,500 MTs of petrol and 376,000 MTs HSD is available in the country and enough for 12 to 17 days.

In a statement, the division said, "It is unfortunate that some OMCs and/or their dealers have resorted to such methods for profit maximization that is causing shortages/dry outs for the general public are having an adverse impact on the lives of the esteemed consumers."

However, appropriate actions are being taken jointly by the Petroleum Division, the Oil and Gas Regulatory Authority, the Competition Commission of Pakistan and all relevant stakeholders, including the provincial governments proactively normalise the situation.

The oil and gas regulator observed that the price of high octane blending component (HOBC) being charged in the market at various retail outlets is considerably higher than its cost.

There seems to be a form of consensus between various OMCs to sell HOBC at a much higher price.

The regulator asked them to reduce the price to a reasonable level based on their cost, lest the CCP takes notice of such cartelization.

Copyright Business Recorder, 2020

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