ISLAMABAD: Pakistan, being a net importer of crude oil and refined products, lacks sufficient feedstock to fully utilize its refining capacity, necessitating the import of crude oil, according to industry experts. This response comes amidst news that Pakistan State Oil (PSO) has lost 5% of its market share to Gas & Oil Pakistan Limited (GO).
Experts explained that the country’s refineries cannot produce enough gasoline and diesel to meet national demand, prompting oil marketing companies (OMCs) to import refined products. To manage this, the Oil and Gas Regulatory Authority (OGRA) conducts monthly product review meetings where OMCs submit their sales forecasts. These forecasts are then compared with refinery production, and any shortfall is addressed through imports by OMCs.
Refineries establish supply agreements with OMCs, setting volumes to be collected bi-weekly. Long-term relationships, often based on ownership or historical ties, exist between refineries and older OMCs.
GO’s recent strategic move to secure additional supplies from Aramco is aimed at maintaining a steady supply to its customers and preventing crises. Despite losing market share in recent years due to liquidity challenges linked to government receivables, GO is now regaining its position. The release of some receivables and Aramco’s investment have enabled GO to secure supplies for its 1,200 retail outlets.
