ISLAMABAD: The government is likely to establish Strategic Petroleum Reserves (SPR) storage facility for 30-day consumption under the umbrella of OGRA for which an Infrastructure Development Levy (IDL) at the rate Re 1/litre on diesel and petrol will be charged, sources close to Minister for Energy told Business Recorder.
Pakistan is an energy deficient country, importing 85% of its fuel requirements. In FY-21, the country imported a total volume of 17.4 million metric tons (MMT) of fuel. It included 8.2 MMT of crude oil, 3.2 MMT of diesel and 6 MMT of petrol.
Presently, Oil Marketing Companies (OMCs) are obligated to maintain stocks equivalent to their 20 day demand on commercial requirement basis. Diesel and petrol are the major products, which contribute around 80% of the total requirement in the country. The country’s existing storage capacity of petroleum products and crude oil available with OMCs, refineries and pipeline operators is around 2.5 and 0.9 MMT, respectively.
Pakistan is heavily dependent on oil imports but has no emergency plans or Strategic Petroleum Reserve (SPR) to handle the oil supply disruptions. Sharing the background, sources said, Federal Cabinet, on April 1, 2021, on the “report of the Inquiry Commission to probe into the recent shortage of petroleum products in the country and matter related or incidental thereto” directed for the construction of strategic storages of refined products and crude oil.
Moreover, Lahore High Court, in its judgment on a writ petition filed on the Commission’s report, has also emphasized “ensuring that strategic storage is preserved in all eventualities”.
In compliance of the Cabinet decision, Petroleum Division constituted a working group comprising of high-level representation from the oil industry, which has developed a Concept Paper on the development of SPR in the country.
Copyright Business Recorder, 2022