KARACHI, Feb 26: Minister for Petroleum and Natural Resources said on Wednesday he had instructed oil marketing companies to maintain stocks at maximum levels given fears of a US-led attack on Iraq.

“Pakistan has already built its strategic reserves up to 28 days,” Nouraiz Shakoor Khan told Reuters.

Given concerns about an imminent war in Iraq, he said, “oil companies have been told to keep their stocks at a maximum.” Khan said a contingency plan was in place to meet any eventuality.

“Pakistan imports oil from Saudi Arabia, Kuwait and the UAE. We don’t see any disruption in our supplies even in case of war,” he said.

However, the oil import bill could shoot up, he said.

“In case of damage to the oil wells, international prices would shoot up,” he said. “Domestic oil prices would also rise in line with the international trend.”

Khan said it was difficult to predict the impact of rising prices, but added: “We don’t think the war would last many days. It would be over within days.”

Pakistan’s import estimate for the current financial year 2002-03 is around $3.5 billion.

Longer term, Khan said Pakistan planned to limit its oil import bill by converting power generation units from furnace oil to cheaper natural gas. It was also pushing ahead with plans to convert petrol-driven public vehicles to natural gas,” he said.

“In the long-run, this will bring down the oil import bill,” he said.

While Pakistan had not discovered any big oil reserves, it has several natural gas fields and also plans to import gas from Turkmenistan, Iraq and Qatar through separate pipelines, Khan said.

Last week, Afghan and Turkmen officials held talks in Pakistan on a gas pipeline running from the Central Asian state via Afghanistan to Pakistan.

Khan said a feasibility study for the $3.5 billion pipeline would be completed by September.—Reuters