ISLAMABAD: Prime Minister Imran Khan on Tuesday directed authorities to initiate legal action against those oil marketing companies who were suspected of creating “artificial shortage” of petrol and ensure regular supply of fuel across the country within 48 to 72 hours.
The decision comes after the supply of petroleum products were seriously affected in many parts of the country earlier this month as oil marketing companies and relevant authorities failed to maintain mandatory stocks at designated depots.
“Any company that is not maintaining mandatory stocks to ensure sustainable supply to its outlets as per its license will face punitive actions, including suspension and cancelation of license and heavy fines,” the prime minister said while chairing a federal cabinet meeting in Islamabad.
The cabinet noted that the Oil and Gas Regulatory Authority (OGRA) and Petroleum Division had legal authority to physically enter and inspect oil companies’ storage facilities. It also directed the Petroleum Division to constitute joint raiding teams comprising OGRA representatives, officials of the Federal Investigation Agency (FIA) and district administration functionaries to inspect these stocks.
“The teams will inspect all petrol depots and storage facilities,” the cabinet said. “They have all the authority to enter any site.”
The prime minister said that anyone found involved in hoarding “shall face full force of law, including arrest and forced release of such stores.”
Earlier this month, some oil marketing companies failed to order imports and scaled down the supply of local production from refineries in anticipation of a reduction in prices to prevent inventory losses. This ultimately led to shortage and rationing of petrol to avoid a total dry out in the country.
All oil companies and refineries are bound by their licensing requirements to ensure a minimum of 21 days of consumption cover of all petroleum products at all times, irrespective of peace or war. But none of the 80 to 90 oil marketing companies and refineries reportedly met this mandatory requirement and the country’s overall average stocks of petrol and high speed diesel did not constitute more than 11-day cover in the last week.
During the cabinet briefing, the energy ministry said that total supplies available in the country in June 2019 were 650,000 metric tons while supplies arranged for June 2020 are 850,000 metric tons.
“The stocks that are being hoarded will be identified and ensured to be made available in the market and action taken against hoarders,” the cabinet decided.
It also urged the public not to engage in panic buying, while the prime minister directed all relevant authorities to ensure that every oil company maintained its 21-day mandatory stock to meet its license conditions.