ISLAMABAD: A Senate panel on Thursday warned the government of shortage of high speed diesel (HSD) and suggested complete freedom to the private sector to procure and import liquefied natural gas (LNG) to address the shortage of compressed natural gas (CNG) and avoid circular debt.

A meeting of the Standing Committee on Petroleum, presided over by Senator Abdul Qadir, discussed strategy to handle oil and gas imports and their supplies and prices in the current scenario of Russia-Ukraine conflict.

The committee expressed apprehension that in the near future the country will face a severe diesel crisis and advised the government to take timely measures to prevent any such crisis. However, the committee was informed by the Pakistan State Oil (PSO) that 26-day stock was already available and supplies for the next month had also been secured from long-term G2G supplier — Kuwait Petroleum Corporation.

Fears severe diesel crisis in near future

Senator Qadir lamented that the entire onus was on the PSO for diesel supplies while some local refineries were not extending supplies to other marketing companies. He recommended sharing the burden of PSO for the supply of diesel and taking practical steps to resolve the issue of shortage of HSD as the harvesting season was on the cards.

Petroleum Division officials said that in order to avert any shortage in the market, confide­nce needed to be given to OMCs that the price differential claims (PDC) shall be promptly paid for which the government had put in place an effective mechanism.

The meeting was informed that PDC for March 1-15 was estimated at Rs883 million but it was expected to be around Rs30 billion for the subsequent fortnights depending upon international oil prices. PDC for second half of March was expected to be Rs28 per litre.

On the question of the government strategy to handle the oil import and prices in the current scenario of Russia-Ukraine conflict, the committee was informed that the prime minister had announced a relief package on Feb 28 under which prices of petrol and diesel had been cut by Rs10 per litre.

The Petroleum Division repor­­ted that gas companies had been a victim of the government’s policy to subsidise gas and new laws had been enacted empowering Ogra to notify the sale price if the government failed to give timely advice on prices within 40 days.

Published in Dawn, March 18th, 2022