Pakistan inching towards acute shortage of POL products

I am a great fan of Dawn newspaper and Khaleeq Kiani. The story published on Monday Pakistan's fuel reserves fall below strategic levels highlights a few points. These include: 1) Prime Minister and Ministers don’t have time to focus on strategic issues of national importance, 2) they are also devoid of acumen required for strategic planning and 3) bureaucracy, picked up by politicians also tows the lines of their big bosses.

Knowing Khaleeq, I will not mince my words and say without hesitation that this story should have appeared much earlier. International price of crude oil took a nosedive in 2014 and since then has been hovering around less than USD50 per barrel. This provided an excellent opportunity to Pakistan to 1) construct additional storage facilities and 2) build strategic reserves. However, the policy planners and decision makers failed on both the fronts miserably.

Some time back I had posted a blog that a few refineries were busy in creating facilities to add their production and broaden product mix. Lately, I also posted a blog highlighting acute shortage of HOBC. Even at that time I was fully convinced that refineries were operating below optimum capacity utilization and country’s dependence on imported white oil products were on the rise.

This reminds me that at one stage three new refineries were on cards but even PARCO deferred it Khalifa point refinery. This clearly showed ‘confidence deficit’ and I could not resist from saying that if local investors are shy the country should not expect foreign investment.

Please allow me to say that the worst hindrance in establishing of energy and power generation companies in Pakistan is ‘circular debt’. Following policies of international donors blindly has put the cart before the horse. Added to this is failure of the government to contain blatant pilferage of electrify and gas. The menace prevails due to the absence of political will and inefficient regulatory and legal framework.

The incumbent government, since coming into power has been issuing new/revised deadlines for getting rid of load shedding, I often fear that it is hoping against the hopes. The reason is simple, unless the government makes required structural changes, stopping pilferage is almost impossible. Besides this, the government has to prove by act that is serious in overcoming pilferage and recovery of outstanding dues. Else be ready to face even the worst conditions.