Initial report terms OMCs responsible for petrol crisis

ISLAMABAD : The preliminary report on the petrol crisis has held oil marketing companies (OMCs) responsible for black marketing and hoarding of petroleum products, recommending strict action against them. In its initial findings, the joint investigation committee has recommended that strict action be taken against oil companies for installing dangerous storage tanks for petroleum products near private oil terminals, according to media reports. The report states that Pakistan State Oil (PSO) oil terminals were operating 24 hours a day during the crisis, adding that its market shares before the shortage in supply ranged between 32 percent and 36 percent. However, the increase in supply of oil during the petroleum crisis enhanced its market share to 54 percent. The report added that the three private companies against whom cases have been filed had a large piece of the market share which declined during the petroleum crisis. Last week, the government fined six oil marketing companies (OMCs) with Rs40 million for their non-compliance with storage requirements, bringing to an end a month-long blame game after an adverse shortage of petrol and diesel amid the lockdown in the country. Shell Pakistan and Total Parco were each fined Rs10 million, while Attock Petroleum, Puma, Gas and Oil Pakistan and Hascol were imposed a penalty of Rs5 million each, according to the Oil and Gas Regulatory Authority (OGRA). Three show-cause notices were also issued to OMCs, including Byco and BE Energy. The OGRA said these OMCs were found involved in a violation of their licenses and directed to pay the penalty within a month. The OMCs could file review petition only after paying half of the penalty, the regulator said. The authority warned OMCs of further penalties if they could not improve the supplies at their outlets. The Oil Companies Advisory Council, an informal body representing the downstream oil industry, declined to comment on the next line of action. The OGRA’s decision followed show-cause notices issued on June 3 to the OMCs to explain their position regarding the availability of petroleum products at their retail outlets. The Petroleum Division of the Energy Ministry also constituted a committee to probe into the shortage of petrol and diesel.