LAHORE, July 4: The petrol squeeze continued in the city on Wednesday, largely because of panic buying, despite improved supplies and administrative measures by the provincial and city district governments.
The squeeze, which started when the government reduced prices of the petroleum products on July 1, worsened as petrol stations stopped selling petrol and diesel to stave off loss on stocks – creating an impression of shortage.
It worsened by weekend suspension of supplies from port to inland stations and following bank holidays to start new fiscal year.
All these factors caused panic buying, which is still to ease in the city though the petrol station owners now claim much more improved supplies and sale.
“It is pure panic buying, which keeps shifting long queues from one gas station to another,” says Muhammad Sadiq –owner of a petrol station.
People were purchasing ten times more than their usual daily consumption, fearing worst in the next few days and deepening current crisis, he said. If they started purchasing what was required for the day, things could ease within 24 hours, he added.
The supplies would improve anyway in the next 48 to 72 hours because supplies had gained their usual momentum, but during these two to three days long queues would keep creating an impression of squeeze on supplies, he claimed.
“People also need to realise that no station can afford to stop fuel sale even if it drops by 50 per cent,” says Muhammad Shabir – owner of another station. “Price is applicable for the next 15 days and no owner can afford to keep stocks for half a month because overhead charges would simply overrun all calculations. So, any one having stock would have to sell them. What actually happens is that some owners, fearing drop in prices, place much less orders during the middle and end-month period.
They do so only to minimise their loss that they could otherwise incur on stocks in case of price fall.
These owners start placing orders once new price is announced. During that time (between placement of order and supplies) people, who also normally had stopped purchasing fuel in anticipation of reduction in price, have a run on station. Thus, that 48-hour time lag upsets the market. Panicky government takes administrative action, causing even more problem. At least government should know better that if imports are streaming in on-time, there can only be management issue not that of supplies. Thus, every one needs to take things easy, and it would ease out,” he said.