ISLAMABAD: One of the leading oil marketing companies (OMC) has blamed incorrect demand forecast for petrol in quarterly product review meeting (PRM) held by the Petroleum Division, cancellation of import vessels, and oil refineries production cuts, as contributing factors for the current shortage of petrol in the country.

Shell Pakistan Ltd states if the government accommodated demand figures presented by the OMCs in the PRM meeting held in March, 2020, and not issued directive to cancel the import orders, the people may not have faced petrol shortages in various parts of the country.

It further states that Shell has 35 million litres petrol in storage including nine million litres dead stock. Six million litres are at the stage of transportation. Around 19 million litres petrol is available, enough for six days.

It states three cargos of the OMCs reached Karachi including Shell, and soon complete supply line will be restored. The PRM reviews the demand for the next three months, and after the allocation of local refinery production, the balance is allowed to be imported.

The RMC has representatives of the OCAC, the Pakistan State Oil (PSO), refineries, the Petroleum Division, and minutes of the meeting are also circulated to the Oil and Gas Regulatory Authority (Ogra) and other relevant departments, which foresee future demand, and decide import of oil.

In a virtual meeting, Habib Haider, manager external communications, Shell Pakistan Ltd said that the show cause notice issued to Shell by the Ogra blaming for stock hoarding, and other allegations were confusing for them.

He said the company would respond under the due rules and regulation of the oil and gas regulator. Talking about the mandatory 20 days petrol stock by the OMC, he said they had fulfilled the obligation in Sindh and Punjab and northern region would soon be covered.

He said once contract was cancelled, it required at least 10 to 15 days to finalise the re-negotiation on contracts. He said the company had cancelled the import contract of petrol on the directives of the Petroleum Division.

He further said that in the last three months, there was no change in their market share. They were ready to bear more loses in the future. Unlike April, he said the demand in petrol jumped to double in May after ease down in lockdown and economic activity.

When the global oil prices reduced significantly, even tankers used for storage purposes were hard to find at that time. Responding to another question regarding deregulation of petroleum products, he said the OMC would like to examine the amendments made in rules and regulations of the Ogra before going in support of the proposal of de-regulation of petroleum products.

Replying to another question regarding possible oil hedging to get benefit of the slump in international oil prices, he said that law and rules did not permit OMCs for oil hedging, and the company really did not need this arrangement as all their fuel supply contracts covered next three months period.