OGRA’s Inspection Failed to Control Oil Shortage, Nadeem Babar’s Decision to Suspend Import Affected Oil Supply

Karachi (Report Syed Rizwan Amir): Oil shortage reported from many cities despite the efforts of Oil and Gas Regulatory Authority to ensure smooth supply. OGRA inspected oil companies’ depots and petrol pumps but, this inspection failed to yield the required result.

FI obtained official letter, written on May 28, which directed Oil Marketing Companies to cooperate with the OGRA teams. “Please ensure availability of staff at all storage locations for access or smooth conduct of inspections by HDIP specially on May 30 till June 2, 2020,” stated OGRA letter.

OGRA’s Senior Executive Director wrote to DG Hydrocarbon Development Institute of Pakistan on May 28, that an inspection should be initiated to verify petroleum products availability at depots, petrol pumps and refineries storage.

Sources said inspection were conducted at certain spots till June,2,2020. Oil shortage started in June when government once again reduced oil prices. This was surprising as oil companies are bound to have stock of 14 to 21 days.

Oil companies are blaming government for the shortage. An oil sector expert, requesting anonymity, told FI that government suddenly stopped oil import which caused disruption in the supply chain. He said Pakistan decided to suspend oil import in the end of March. All orders for April were cancelled. He said an oil tanker takes days to reach Karachi than oil is shifted to refineries for developing different products. “Now you can imagine impact on supply chain when government did not import oil for more than two weeks.”

PM’s advisor Nadeem Babar had ordered suspending oil import at the end of March. He asked companies to cancel the April order. Oil import activity had stopped immediately. This decision had surprised everyone because prices were on record low. Arab countries were offering oil on discount prices at that time. It was a good time to fill all storage facilities and provide relief to the people for many months. But it seems neither Nadeem Babar nor anyone in the ministry thought about the long term impact of stopping oil import. At the end of April, Nadeem Babar directed oil companies to resume oil import.

Today’s shortfall also exposed OGRA’s ineffective role as law enforcer. Despite inspection, Pakistan’s many cities are facing oil shortage. People are forced to buy oil at inflated price.

Report Syed Rizwan Amir, Contact 03009246801

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