KARACHI, Dec 4: As stocks of petrol are reported to have been left only for a week, the Pakistan State Oil (PSO) has sought import of 25,000 tons of petrol for the third week of December for improving the country’s stocks position.

Earlier, petrol stocks used to hover between 12 and 14 days.

Expecting a higher consumption after a substantial price cut, the government has finally given a go-ahead to the PSO for imports.

The government has initiated imports after resolving the issue of foreign exchange following receipt of IMF’s first tranche of $3.1 billion.

The tender for the period of Dec 19-21 supply is on “firm basis” while two cargoes of 20,000 tons each have also been sought on an “optional basis” for the period of Dec 8 to Feb 9, 2009.

Petrol now sells at Rs57.66 a litre as compared to its peak level of Rs86.66 between July 21 and Sept 1. The gap between CNG and petrol has also shrunk considerably as CNG now is priced at Rs44.50 a kg.

Replying to a question, Pakistan Refinery’s GM (Supply & Planning) Aftab Husain said that currently petrol price in the world market has declined to less than $40 a barrel as compared to $120 in July. It means that import of 25,000 tons of petrol would now cost $8-8.5 million.

Had this quantity been imported in July this year, it would have cost over $20 million when world prices were at their peak, he said.

The local refineries, he said, are running at 60-75 per cent capacity, thus meeting the supply and demand gap.

He added that petrol import is mainly aimed at maintaining a balance of stocks at a reasonable level. Otherwise, refineries have the capacity to meet the growing stocks.

Local refineries under the current operating level are now producing around 120,000 tons of petrol every month, he said, adding that refineries are operating at low level because of problems being faced by them in confirmation of Letters of Credit from foreign banks.

Due to huge amount of circular debt (slow payments from the oil marketing companies to refineries and power sector receivables to PSO), this is causing a liquidity crunch in the refining industry, he said.

Refineries, he added, have already suffered huge losses in the first quarter of current financial year due to rising rupee-dollar parity, stock losses and collapse of international refining margins.

Aftab said that Pakistan has been exporting and importing petrol for the last few years keeping in view the demand and supply situation.

According to data compiled by Oil Companies Advisory Committee (OCAC), Pakistan imported 31,365 tons of petrol in July 2008 while some 51,697 tons had arrived in December 2007, 39,287 tons in November 2007 and 36,401 tons in October 2007.

Similarly, petrol exports in 2008 were recorded at 24,707 tons (7,002 tons in February, 7,205 tons in March and 10,500 tons in April).