KARACHI: The import of high-speed diesel (HSD) fell sharply to about 42,000 tonnes in January from 288,000 tonnes in December of the current financial year, according to data compiled by the oil sector on Tuesday.
Commenting on the steep decline in January, oil sector officials said that unrealistic demand and supply projections by the Oil and Gas Regulatory Authority (Ogra) had led to excessively high HSD imports in December, resulting in an oversupply in the domestic market.
They said that a temporary improvement in HSD sales for a few days, coupled with Iran-US tensions in November, had prompted the regulator to make overly optimistic projections.For instance, they said, Pakistan State Oil (PSO) had initially been scheduled to import 110,000 tonnes of HSD in two cargoes in December. However, Ogra directed the state-run company to import 220,000 tonnes in four cargoes.
In addition, a private oil marketing company (OMC) was also allowed to import HSD during the month, pushing total imports of the product to a record level.“This huge quantity of imported HSD was unnecessary, as the country did not require such volumes. Unrealistic projections based on flawed assumptions led to this surge in imports,” oil sector officials said.
In view of the excess supply, Ogra subsequently decided that no HSD would be imported in January. However, PSO requested permission to import 45,000 tonnes along with jet fuel, which Ogra approved.
Officials said that if the current pace of HSD imports continued, total imports could reach 2 million tonnes for the fiscal year, which they described as unrealistic.“They should be closer to 1.5 million tonnes, given local refinery production of around 500,000 tonnes per month,” they said when asked about year-end projections.
According to oil import data, the country imported 45,000 tonnes of HSD in July, which rose to 162,000 tonnes in August. Imports then fell to 85,000 tonnes in September before increasing to 144,000 tonnes in October. They climbed to 205,000 tonnes in November and surged to 288,000 tonnes in December, before plunging to 42,000 tonnes in January.Total HSD imports during the first seven months of the current fiscal year stood at 970,000 tonnes.
