PSO granted exclusive rights

RECORDER REPORT

ISLAMABAD: Pakistan State Oil (PSO) has been granted exclusive rights for importing high-speed diesel (HSD) cargoes to meet the deficit of supply and demand.

The Oil and Gas Regulatory Authority (OGRA) has been directed to consult with the stakeholders in the oil industry and formulate a framework for the agreement. The PSO imports HSD from Kuwait Petroleum Corporation (KPC) under a government-to-government agreement and spot purchases sometime.

The government has allowed PSO a weighted average premium on HSD.

In the first quarter ended September 30 of the current fiscal year 2023-24, the PSO’s market share in diesel and gasoline increased by 4.5 percent and 4.2 percent respectively, reaching 55 percent and 47.9 percent. The PSO remained a top contributor having 37.43 percent of total HSD storage capacity.

The Oil Marketing Association of Pakistan (OMAP) alleged that the move would create a monopoly for the state-owned PSO and hurt the competitiveness and innovation of the oil sector. Earlier, the association drew the attention of the Ministry of Petroleum towards the matter regarding the calculation of the exchange rate for petroleum imports.

Sources in PSO say that the consumption and import of HSD are influenced by various factors, including the harvesting season, economic conditions, infrastructure projects, cross-border trade, and local production dynamics. This results in monthly and yearly fluctuations, driven by the changing dynamics of demand and supply. The PSO diligently monitors these trends and adjusts strategies to ensure a stable and reliable supply of HSD to meet the country’s energy demands. Over the recent years, the annual average imports for the country have ranged between 2.5 to 3 million MT, with PSO contributing approximately 2 to 2.5 million MT to fulfil Pakistan’s energy requirements.