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Oil industry foresees petrol and diesel shortage, warns OGRA

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  • Oil Companies Advisory Council informed OGRA about looming shortage in a letter.
  • Under product review, deficit of 210,000 MT of HSD and 147,000 MT of petrol was worked out.
  • Says petrol import corresponding to anticipated sales volume and stock cover has not been booked.

KARACHI: The oil industry has communicated to the government about an expected petrol and high speed diesel (HSD) shortage in the coming days due to inadequate imports and limited local availability, reported The News.

The Oil Companies Advisory Council (OCAC), a representative body of the oil sector, has informed the regulator Oil & Gas Regulatory Authority (OGRA) about the shortage in a letter.

The OCAC said that motor spirit/petrol and HSD imports were finalised after extensive deliberation and allowed to oil marketing companies (OMCs) in line with their demand in product availability review of products for the month of November 2022.

Under product review, deficit of 210,000 MT of HSD and 147,000 MT of petrol was worked out. It was highlighted in the meeting that HSD imports in November might be challenging owing to limited availability in the international market and very high premiums; hence so far, only PSO has booked shipments of 220,000 MT & 10,000 MT by Flow Petroleum.

However, it is alarming to note that petrol import corresponding to the anticipated sales volume and stock cover has also not been booked. The import plan should have been finalised by the importers but, so far, there is a deficit in the import plan, the OCAC letter said.

This critical issue was also highlighted in the meeting held on November 1 with the industry representatives; however, no firm commitments have been received from the importing OMCs in writing, it said.

A few OMCs sales for October have been higher than they expected and have been continuously carrying low stocks since October 2022.

The OMCs, which were supposed to bring imports for use in October, received their shipments in the last week of October; hence, product was not available for use during the month it was intended for. Similarly, the OMCs which were allowed imports in the previous month for use next month have already consumed the parcels in advance, the letter noted.

“Keeping in view the ongoing sales trend and the number of days cover currently being maintained by the OMCs, we foresee product availability challenges in various pockets of the country in days to come, due to inadequate imports and limited local avails,” the OCAC said, requesting the regulator to issue necessary directives to the importing OMCs for strict adherence to import plans to avoid a shortage.

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Moody’s says the IMF programme will increase Pakistan’s foreign financing.

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Moody’s, a reputable international rating agency, has stated that Pakistan’s chances of acquiring funding will increase as a result of the recent agreement with the International Monetary Fund (IMF), which offers dependable sources for that purpose from both friendly countries and international financial institutions.

According to a recent Moody’s analysis on Pakistan’s economy, social unrest and tensions could result from Pakistan’s ongoing inflation. The country’s economic reforms may be hampered by increased taxes and potential changes to the energy tariff, it continued.

Moody’s, on the other hand, agrees that the coalition government headed by Shehbaz Sharif of the PML-N is in danger of failing to secure an election mandate, which may potentially undermine the successful and long-lasting execution of economic reforms.

The government’s capacity to proceed with economic changes may be hampered by societal unrest and poor governance, according to Moody’s.

In order to appease the IMF by fulfilling a prerequisite for authorising a rescue package, the government raised the basic tariff on electricity, which coincided with the most recent increase in fuel prices announced on Monday. This report was released by Moody’s.

Food costs have increased in the nation, where the vast majority is experiencing an unprecedented crisis due to the high cost of living, following the government’s earlier presentation of a budget that included a large increase in income tax for the salaried classes and the implementation of GST on commodities like milk.

The most recent comments were made following Islamabad’s achievement of a staff-level agreement for a $7 billion contract that spans 37 months and is contingent upon final approval by the IMF Executive Board.

It states that Pakistan will need foreign financing totaling about $21 billion in 2024–2025 and $23 billion in 2025–2026, meaning that the country’s present $9.4 billion in reserves won’t be sufficient to cover its needs.

Therefore, according to Moody’s, Pakistan is in an alarming position with regard to its external debt, and the next three to five years will be extremely difficult for the formulation and implementation of policies.

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Base Of bilateral relations: China And Pakistan Reiterate Their Support For CPEC

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China-Pakistan economic corridor is a major project of the Belt and Road Initiative, and both countries have reiterated their commitment to it. It remains a fundamental aspect of their bilateral relations.

Vice Chairman Zhao Chenxin of the National Development and Reform Commission of China and Minister Ahsan Iqbal of Planning and Development met in Beijing, where Ahsan Iqbal made this assurance.

The summit made clear how committed China and Pakistan are to advancing their strategic cooperative partnership in all weather conditions.

The focus of the discussion was on how the CPEC was going, with both parties reviewing project development and discussing how the agreement made at the leadership level will lead to the launch of an enhanced version of the CPEC.

In order to improve trade, connectivity, and socioeconomic growth in the area, they emphasised the need of CPEC projects.

The Ml-I Project, the KKH realignment, and the Sukkur-Hyderabad motorway—the last remaining segment of the Karachi-Peshawar motorway network—were all to be expedited.

Expanding the partnership’s horizons to include technology, innovation, education, connectivity, and renewable energy sources was another topic of discussion.

Specifically in the special economic zones being built under the Comprehensive Economic Cooperation (CPEX), Vice Chairman NDRC emphasised the possibility of China investing more in Pakistan.

In addition to expressing confidence in the ongoing success of the two nations’ collaboration, Zhao Chenxin reiterated China’s support for Pakistan’s development aspirations.

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Pakistani government raises petrol prices

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A recent announcement states that the price of petrol has increased by Rs 9.99 per litre, to Rs 275.60 per litre.

The cost of high-speed diesel has also increased significantly, rising by Rs 6.18 a litre. Diesel is now priced at Rs 283.63 a litre.

Furthermore, kerosene now costs Rs 0.83 more per gallon.

The cost of products and services is predicted to rise in response to the increase in petroleum prices, further taxing household budgets and jeopardizing the stability of the economy.

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