Islamabad:
Oil Minister Musadik Malik has expressed ignorance about excessive diesel imports by some oil marketing companies (OMCs), which are jeopardizing the operations of local refineries.
The Oil Companies Advisory Council (OCAC), which represents refiners and exploration companies, recently raised the issue of bulging diesel inventories, which jumped to 49 days of consumption.
He blamed the situation on permission for bulk imports of diesel from the Petroleum and Natural Gas Regulatory Authority (Ogra) to some OMCs, resulting in reduced demand for the products produced by the refineries.
When asked by reporters at a press conference on Wednesday, Oil Minister Musadik Malik expressed ignorance about the diesel crisis. “I will take it up with Ogra and action will be taken against those involved in this crisis,” he remarked.
Meanwhile, the Ogra spokesperson in a statement said that a meeting was held on Wednesday with the representatives of refineries and OMCs to discuss and adopt a strategy to address the challenges associated with the build-up of diesel stocks at the refineries. He said September OMC cargoes had been postponed and the three cargoes booked for October would be streamlined/cancelled. “December shipments will also be canceled (if required) in due course.”
Gas crisis in winter
Responding to a question on the threat of gas shortage in winter, the petroleum minister said Pakistan imports 1,000 million cubic feet per day (mmcfd) of liquefied natural gas (LNG). Therefore, “there will be no shortage of gas in the winter season.”
The country can require a single cargo of LNG on site, he said, adding that the cost of domestic gas was Rs 1,380 per million British thermal units (mmBtu) and if it was blended with LNG, the cost would go up to Rs 1,600 per mmBtu.
He ruled out any plans to further increase gas prices for consumers. While discussing the weighted average cost of gas, he termed the proposal similar to the “Kalabagh” problem. The previous Pakistan Tehreek-e-Insaf (PTI) government had passed a law on weighted average cost of natural gas in parliament. But the federal government did not fully implement it because of opposition from the provinces.
IP gas pipeline
Responding to a question about progress on the Iran-Pakistan natural gas pipeline project, the minister refused to share details without consulting Pakistan’s attorney general.
However, he rejected talk of a possible $18 billion penalty if Pakistan does not carry out the project. Sources said the minister was reluctant to share details because the Foreign Office had barred him from making any statement on the IP pipeline project, which could upset Iran’s arch-rival the United States.
Installation of new refineries
Musadik Malik said the government is working to attract billions of dollars in investment from Saudi Arabia to set up an oil refinery in Pakistan.
He revealed that the government has been in talks with industrialists, including from China, considering the boom in electric vehicles in the neighboring country. The minister said the government has commissioned a report on setting up a Greenfield refinery, which will be completed by December. The refinery will include 50% petrochemical plants considering the growing demand for electric vehicles.
After the finalization of the report, the government will expedite the work on the new refinery and is already working with all investors to attract investment.
Talking about the Reko Diq copper and gold mining project, the minister said the government is in talks with Saudi Arabia as well as financiers to attract investment.
“The Reko Diq project is an asset for Pakistan and is at an advanced stage,” he observed.
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