PSO-OIL Crises in Pakistan

Recently, the area of Punjab and Federal region faced massive turmoil of petrol shortage during the month of January, 2015. Even the gigantic cities also felt the pain.

At the initial stage it was difficult for people to find any petrol station with the availability of petrol. If someone found one, there were unending queues of 4 wheelers and 2 wheelers. This situation made people aggressive but they stood calm for their turn to get petrol for running their wheel of life.
All this could not happen overnight, since ministry of petroleum is bound to ensure 21 days oil shortage in the country. The situation was enough worse and caused fight among people. Petrol stations called police to handle the crowd because verbal fight was taking the shape of physical fight. It far the time in the history of Pakistan when whole families including children and females were also seen there to obtain petrol holding cans in their hands.

Some unique tricks were also used to obtain petrol like men’s wearing of burkas for obtaining petrol easily.

The Government of Pakistan considered four most senior officers of Pakistan state oil responsible for the 10 days crises and suspend them for their duties which handed over to junior officers.

Minister of petroleum shahid khaqan abbasi apologized from the government and people and also offered his volunteer resignation. He said in the press conference in Islamabad that the shortage was due to mismanagement and extensive demand for the petrol in the first week of January.
Pakistan state oil is a multinational petroleum corporation involved in marketing and distribution of petroleum products (Gasoline, diesel, fuel oil, jet fuel, LPG, CNG etc) having a network of 3689 filling station. It is most popular in oil industry and it captures 60% of market share of the total oil market with customer portfolio. PSO is the first public company in Pakistan to pass the PKR 1 trillion revenue mark.

It is found by sources that the main reasons behind petrol crises is the delayed or no payment by the ministry of water and power and PSO was unable to import oil shipments in time. Therefore, ministry of power is liable to pay Rs 171 billion to PSO for the sake of furnace oil.

Pakistan international airlines is also a big defaulter of PSO and liable to pay Rs 13 billion. The Oil marketing companies’ also failed to play their role and they were involved in hoarding and black marketing.PSO made more than its normal supplies during crises and carried the burden of other oil marketing companies that failed to maintain stock.

Oil and gas regulatory authority (OGRA) is also responsible for the crises but the chairman OGRA denied it and refused to resign. PSO cancelled its letter of credit and suppliers who refused to make credit supplies with PSO.The PSO forced the Federal Government to release Rs 15 billion to save itself from defaulting on its LC’s payment.

Prime Minister Nawaz Sharif cancelled his Switzerland tour to attend the world economic forum, to get awareness of every measure taken for smooth availability of petrol in the whole country. Moreover, he also arranged meetings on daily basis with key ministers to control the crises in future.
The supply of petroleum is expected to increase by the next month. The prices of petroleum products are revised every month by the government (ministry of finance) and petroleum prices are suggested by OGRA at the end of every month.

If GOP makes yielding policies for future regarding the crises then unwanted situations in the future can be controlled.