KARACHI, Oct 31: Pakistan has imported 36,000 tons of petrol from September to October in order to meet the demand and supply gap caused by massive decline in smuggling of Iranian petrol, especially in Balochistan and other parts of the country.

Pakistan State Oil (PSO) had imported two firm cargoes of Mogas-87 RON under a tender issued by the company on August 24 for the delivery of September. The same tender had also mentioned two optional cargoes of 18,000 tons each for October and November 2007. Petrol is being imported after a gap of six to seven years.

An official in the PSO, who asked not to be named, did not mention the value of the imported petrol but claimed that it will cost less than the petrol produced by the local refineries.

However, officials in the local refineries believe that one cargo would have cost at least $12-13 million.

The PSO official said that the remaining shipment of 18,000 tons was in the pipeline. It was also decided that the imports would be shared by two other oil marketing companies.

PSO has not issued any new tender for next December onwards delivery as it is currently watching the demand and supply gap. However, the official said that it may issue another tender as demand of petrol is rising and local refineries do not have the capacity to meet the additional demand.

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

The state-run OMC 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 this year for private cars and taxis aimed at reducing colossal state petrol subsidies.

A few months back, Iranian petrol had been selling in areas like Baldia Town, Manghopir, Surjani, Orangi, Lyari, and on University Road etc at Rs 40-45 a litre as its sale had increased because of high price of Rs54 per litre of locally produced petrol.

The Iranian government’s decision had virtually changed the petroleum market scenario in Pakistan.

However, Iranian petrol had lost charm a few months back as the gap between locally-produced petrol and the smuggled one has come down to Rs7 as compared to Rs10 to 15 per litre earlier.

Chairman Pakistan Petroleum Dealers Association (PPDA), Abdul Sami Khan said that smuggling of Iranian petrol to some areas in Balochistan had again started but the quantity was very negligible to be quoted. It is hard to give the exact current price difference between the locally produced petrol and smuggled petrol. However, the arrival of very little quantity of Iranian petrol will not make any big difference in meeting a big gap between demand and supply.

He said he had discussed the smuggling of Iranian petrol with a high customs official four days back so that customs could take steps to curb the illegal entry of petrol from Iran.

He added that he had also discussed the issue of rising demand of petrol in Pakistan with PSO MD Jalees Ahmed Siddiqui, who had assured the dealers that there would be no shortage of petrol as the company had already started importing. it.

According to an official in the industry, petrol sales rose to 352,000 tons in July-September 2007 as compared to 301,000 tons in 2006.

Due to increasing trend in petrol consumption, Pak-Arab Refinery Limited (Parco) had to cancel an international tender for petrol export in July 2007 for onward shipments.

Since then, the refinery had not issued any fresh export tender. Parco had exported 86,290 tons of petrol from Oct 31, 2006, to July 31, 2007.

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 2005-06.