Hurricane Harvey has hit hard the heart of the US energy industry – the impact of which is likely to reverberate across international energy markets. According to Reuters, the hurricane has smashed into Texas shore causing massive flooding that has knocked out 11 percent of US refining capacity, closing all ports along the Texas coast. 
Though the government has not announced if it will make up for any shortfall from the nation’s Strategic Petroleum Reserve, it is such times that warrant the existence of such strategic reserves. The US is the world’s largest holder of emergency crude stockpiles – US Strategic Petroleum Reserves (SPR), which according to latest reports is hovering around 680-690 million barrels of oil.
However, US is not the only country to have strategic reserves. The need for emergency fuel storage increases for crude oil and fuel importing countries. While the US is hoping to gradually decrease these stockpiles due to aging infrastructure and its vision to soon become an exporter, all other major countries are either maintaining or beefing up their strategic stockpiles. One such country is China. Its buying pattern shows that its purchases are quite above what its refineries need, which shows that it is building strategic crude oil reserve for many years now. The size of the reserve however, remains undisclosed.
Even India is planning to quickly ramp up its strategic reserves to meet 90 days of net import coverage from its existing 10-days coverage. As of now, the Indian Strategic Petroleum Reserve (ISPR) is around 36 - 39 million barrels of oil, and the government plans to add another 91 million barrels of capacity by 2020.
Where does this leave Pakistan? Pakistan is highly susceptible to a fuel shortages be it the climatic challenges or the warlike situation against terrorism. But it’s more than a step behind: not only does it not have any strategic reserve policy in place, it does not have the sufficient storage infrastructure to cater to the reserve’s needs.
Recently, the government is seen contemplating surcharge on the sale of all transport fuels to boost petroleum storage capacity. Though no formal summary has been moved, the proposal is of a surcharge of Rs0.1 per litre to enhance storage to cover at least 45 days of domestic consumption. As of now, the stocks are enough to cover no more than 11 to 14 days. Low oil price environment is a good time to buy, but sector’s other adamant issues like circular debt and lack of liquidity has been key inhibiting factors. While there could be a renewed hope and some seriousness in government’s efforts, all such levies in the recent past like fuel equalisation margin, freight margin or GIDC have failed in accomplishing their purpose.
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