KARACHI, Aug 30: Pakistan will now import petrol to meet the surging local demand after massive decline in smuggling of Iranian petrol, especially in Balochistan and other parts of the country.

Pakistan State Oil (PSO) issued on Aug 24 an import tender (firm) of Mogas 87-RON of 18,000 tons for delivery in the middle of September, while the same tender also mentioned two optional cargoes of 18,000 tons each for the period of October and November 2007.

A source in the PSO said the company has received petrol demand from Balochistan since smuggling of Iranian petrol had come down after imposition of rationing system by the Iranian government in the last week of June to private cars and taxis aimed at reducing colossal state petrol subsidies.

The source said since local refineries do not have refining capacity to meet the additional demand, the state-run company had issued a tender for import which would also be shared by two other oil-marketing companies.

Iranian petrol has lost charm as gap between locally-pro-duced and smuggled has come down to Rs7 as compared to Rs10 to 15 per litre few months back.

An official in a local refinery, who asked not to be named, said that one cargo will cost the exchequer a slight burden of $12-13 million.

He said local refineries have a total refining capacity of producing 115,000-116,000 tons of petrol from crude oil.

However, in July alone, petrol sales stood at 120,000-122,000 tons, thus leaving a gap between demand and supply. In July 2006, petrol sales stood at 100,000 tons.

He was of the view that smuggling of Iranian petrol had almost come to a standstill after Iranian government’s decision.

He added that petrol would now be imported after a gap of six or seven years.

Due to increasing trend in petrol consumption, Pak-Arab Refinery Limited (Parco) had to cancel an international tender for petrol export in July.

Since then, the refinery did not issue any fresh export tender.

Parco exported 75,892 tons of petrol from Oct 31, 2006, to June 30.

The refinery will review its export plans for the new fiscal year keeping in view the demand and supply situation of petrol as it thinks that local market comes first.

Petrol had been in surplus for the last one-and-a-half years, witnessing a negative growth due to high price and rising demand of CNG in old and new vehicles.

According to figures of the Oil Companies Advisory Committee (OCAC), petrol sales in 2006-2007 declined to 1.138 million tons from 1.178 million tons in 2005-2006.

A few months back, Iranian petrol has been selling side by side in areas like Baldia Town, Manghopir, Surjani, Orangi, Lyari, University Road etc at Rs 40-45 a litre as its sale had increased because of high petrol price of Rs 54 per litre.

The Iranian government’s decision virtually changed the situation.