Ogra asks GO to Keep Product in bonded Storage

By Newztodays Team

Islamabad :Oil and Gas Regulatory Authority (Ogra) has advised GO Pakistan to keep its product in bonded storage until the third week of September 2024.OGRA’s Unjustified HSD Import Approvals Risk National Oil Supply Chain Integrity and Refineries’ Financial Stability

Ogra in a letter to DG Oil said that GO’s Cargo Management: GO, which was advised to reroute its cargo or hold it at
the outer anchorage until the last week of September, is now being advised to keep its product in bonded storage until the third week of September 2024.

This measure is aimed at easing the pressure on the refineries and for avoiding demurrage costs.

Oil and gas regulator has asked petroleum division that Pakistan State Oil (PSO) must
reassess the contractual quantities locked in with Kuwait Petroleum Corporation (KPC) keeping in view high stocks of diesel.

The high stocks of diesel in wake of imports had led to serious concerns in refineries.

Ogra said that it will improve the situation if PSO revises contracts with KPC.

Ogra in a letter to DG Oil petroleum division said that it would like to correct stock figures reported by refineries.
At the outset, we would like to correct the stock levels reported by the refineries on
August 30, 2024. The OCAC daily fact sheet reports 759,256 M tons Diesel stock as on 30-8-2024 instead of 770,000 metric tons reported by refineries that too inaccurately includes 94,443 metric tons of line fill, which is not available for sale, Ogra said.

It said that actual stock of High-Speed Diesel (HSD) as of August 30, 2024, stands around 664,813 metric
tons, sufficient to meet 44 days of national demand. In this regard, PAPCO has been advised for correction in their reporting sheet.

Secondly the sales, imports, and production estimates and plans are finalised during the Product Review Meeting (PRM) with careful consideration of multiple variables.

These measures are meticulously designed to build resilience into the National Oil Supply Chain.

However, estimates can vary,necessitating continuous monitoring and adjustments to the plans when there are material changes in the underlying assumptions. In light of the current situation, OGRA has taken the following corrective actions, aimed at easing the pressure on
the refineries.

Rationalisation of Imports: PSO has deferred its one Cargo of 55,000 M tons for September, 2024 and is also considering reviewing the December plans. Imports for October will be reviewed/ rationalised in the meeting convened on September 4, 2024.
It is crucial to highlight that PSO is currently holding an inventory of diesel, approximately 336,000 metric tons, constituting 50% of the total stocks. Rule 35(g) applies across the board,
regardless of the size of the company or group. However, PSO is bound by its
government-to-Government agreement with KPC to purchase a minimum of 1.8 million tons of HSD/annum. Given the current demand scenario and the ingress of smuggled products, PSO must
reassess the contractual quantities locked in with KPC. We hope that the situation starts getting better in view of the aforesaid actions.