Oil shortages

Published April 28, 2022

AS the public braces itself for intensified power blackouts in the middle of a countrywide heatwave, reports of diesel shortages in several parts of Punjab, especially from its southern districts, continue to pour in each day. Farmers from Okara to Bahawalnagar to Rahim Yar Khan are running in desperation from one petrol pump to another to try and purchase diesel, with vehicles queuing up in long lines to fill up. Such reports are quite disconcerting as the unavailability of diesel can slow down the wheat harvest and delay cotton sowing in southern Punjab. Diesel shortages have already led farmers to stage demonstrations in different districts. A few reports suggest that some districts have been facing diesel shortages for a month but the authorities haven’t done anything to address the situation, while oil marketing companies have either stopped or are providing fewer supplies to the pumps. Multiple factors are to blame for the ongoing diesel scarcity, including the increase in demand because of the wheat harvest, hoarding by pump owners in anticipation of the reversal of energy subsidies, and supply-side hiccups on account of lower imports.

Ogra, the oil and gas regulator, has, however, rubbished media reports of severe fuel shortages hitting parts of the province, and has claimed that adequate supplies of petrol and diesel are available in the country to cater to the demand of consumers. Likewise, the OMCs and refineries say that ample stocks of motor spirit and high-speed diesel are available and that more imports are on their way to Pakistan. Yet, they subtly point out that port congestion may delay the offloading of cargoes that are waiting for their turn at the Karachi port. There is no doubt that the mismanagement of the energy sector — its failure to procure enough fuel and ensure the maintenance of power plants — by the previous government is largely responsible for the current blackouts and shortages at the pumps. But this is no time to indulge in a blame game. The parties constituting the new coalition set-up knew very well the kind of mess they were going to inherit and should have doubled efforts to avert the crisis rather than waiting for it to worsen before moving in. Once the present crisis is brought under control, the government must start working on a long-term strategy to insulate the economy from international energy supply disruptions and elevated prices so that blackouts and fuel shortages can be prevented.

Published in Dawn, April 28th, 2022

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