As a net importer of both crude oil and refined products, Pakistan does not have enough feedstock to feed refineries and therefore crude oil has to be imported to utilize refining capacity, industry experts say while responding to a report that Pakistan State Oil (PSO) has lost 5% of its market share to Gas & Oil Pakistan Limited (GO).
They alleged that refineries are unable to produce enough petrol and diesel to meet the country’s needs, further leading to importation of refined products by the oil marketing companies (OMCs).
Pakistan has a well-established system of ascertainment of crude oil and refined product requirements. The Oil and Gas Regulatory Authority (Ogra) organizes a product review meeting every month where OMCs provide their sales forecasts. The output from the refineries is then compared to the forecast and the shortfall is allowed to be imported by the AMS.
The experts pointed out that the refineries enter into supply agreements with the AMS and agree on the volumes to be received every fortnight. Most of the refineries have long-standing relationships with the older OMCs, some of which are driven by their ownership while others are based on long-standing ties.
Industry experts said GO’s proactive approach to securing additional supplies from Aramco is a strategic move to prevent any crisis and ensure steady supply to its customers. The company had lost market share over the past two years due to liquidity challenges arising from stuck receivables with the government in the form of sales tax, freight and foreign exchange losses.
However, with some of the requirements released by the government and the investment from Aramco, GO is in the process of getting its stake back and securing supplies to its 1,200 retail outlets.
a href=”https://tribune.com.pk/story/2484837/omcs-allowed-imports-to-bridge-deficit”>Source link
