As international oil prices shed as much as $4 a barrel on Monday, extending last week’s decline as diplomatic efforts to end the war in Ukraine were stepped up, Minister for Energy Hammad Azhar has snubbed reports that Pakistan is left with only five-day stocks of petroleum products.
In a tweet on Monday, Azhar said that “the country has diesel and petrol stocks of more than one month. This is the highest stocks cover for many years. Some newspapers have carried a piece of news that only five-day stock is left. This is fake and contrary to the facts”.
In the international market, Brent crude futures were last down by $3.05 or 2.7% at $109.62 a barrel on Monday.
US West Texas Intermediate (WTI) crude futures eased $3.10 or 2.8 per cent to $106.23 a barrel.
The dip was witnessed in the international market after Russia and Ukraine gave their most upbeat assessments after weekend negotiations, suggesting there could be positive results within days.
Earlier, the Economic Coordination Committee (ECC) of the cabinet had approved an Rs20 billion subsidy for oil marketing companies (OMCs) and refineries to ensure the uninterrupted supply of petroleum products in wake of soaring global prices of the commodity.
The ECC had approved the subsidy to the OMCs and four refineries at a meeting chaired by Finance Minister Shaukat Tarin.
The Ministry of Energy (Petroleum Division) had submitted the summary on reimbursement of price differential claims (PDCs) of OMCs and refineries, in line with the PM relief package of reduction in the consumer prices of motor spirit and diesel by Rs10 per litre. The price differential claim would be paid to the oil marketing companies and refineries by the government as a subsidy to avert any shortage of petroleum products in the market. The ECC had approved a special PDC disbursement mechanism to pay the PDC speedily within 15 days with the opening of a special assignment account with.
The Oil Companies Advisory Council (OCAC) had also called for formulating a fortnightly mechanism for the early reimbursement of the “funded subsidy” agreed by the government.
The oil sector had cautioned of the oil crisis in the country in the wake of the lowering of the price of petroleum products by Rs10 per litre without a backup plan for making out to the losses of the oil companies.
In a letter, the OCAC had demanded for payment of 95 per cent of PDCs within the 10 working days. It had said that the rest of the 5 per cent payment should be released after the internal verification by the regulator.
Sources told Narratives that on the backing of the State Bank of Pakistan, leading banks have agreed to increase the credit limit of major oil marketing companies including the PSO, Shell, Total-PARCO etc and four refineries.
