Pakistan is considering raising oil marketing companies' margins in a bid to encourage them to build their oil stocks and avert future shortages in the country, a petroleum ministry official said Friday.
The government is looking to raise the margin by Pakistani Rupees 0.50/liter (0.55 cents/liter), the official said.
The marketing margin on gasoil is currently at Rupees 1.35/liter, on gasoline at Rupees 1.50/liter and on kerosene at Rupees 1.58/liter.
"The government had previously refused to raise marketing margins on gasoline. However, with the increasing petrol crises in the country, the government has directed Oil and Gas Regulatory Authority to work expeditiously on increasing margins on petroleum products," the official said. OGRA is responsible for setting petroleum product prices in the country.
The official, however, could not give a time frame for when the margins would be raised.
Pakistan has been facing a gasoline shortage since early this month stemming from closures at three of the country's five main refineries and low inventory levels at oil marketing companies.
The gasoline shortage first began earlier this month following a closure at Attock Refinery Ltd.'s Morgah plant, but was aggravated following closures at National Refinery Ltd.'s Karachi refinery and Byco's plant in Hub, Balochistan.
Pakistan typically consumes around 200,000 mt of gasoline a month, of which 25% is imported, while the rest is provided by local refiners.
The shortage prompted the ministry to direct all oil marketing companies to maintain stocks of up to 20 days of consumption and has given them six months to achieve this.
Failure to meet the ministry's requirement would lead to the cancellation of oil marketing companies' licenses or to heavy penalties.
While dominant player Pakistan State Oil has been required to maintain 20 days of refined product stocks, the smaller oil marketing companies only had to maintain seven to 14 days of stocks.
