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Pakistan’s government is aiming to double the country’s oil product storage capacity by inviting foreign and local companies to build additional facilities, a Ministry of Petroleum official said Thursday.
The country’s current storage capacity equates to around 20 days of consumption at 1.2 million-1.3 million mt, and oil marketing companies typically maintain stock levels below that to minimize inventory losses due to price volatility, the official said.
The government will both invite privately-owned domestic and foreign companies to build additional storage capacity and ask oil marketing companies to increase their storage volumes, he said.
«We will provide tax benefits and companies could acquire loans at lower interest rates to hasten the process of increasing the capacity,» the official added.
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Pakistan’s motor gasoline consumption has increased sharply in the past two years as the economy gathers pace, he said.
Consumption averaged 557,000 mt/month over July-October, up from 365,000 mt in fiscal 2015-16 (July-June) and 311,000 mt in fiscal 2014-15.
Raising storage capacity was necessary given the sharp increase in the consumption of oil products in Pakistan, especially gasoline, said Zeeshan Afzal, director of research at Insight Securities.
It would also help meet any shortfall in supply or delay in seaborne cargo arrivals, he said.
Pakistan’s gasoline consumption rose 17.5% year on year to 4.385 million mt in fiscal 2015-16, while high speed diesel consumption rose 2.6% to 6.223 million mt and furnace oil sales fell 250,000 mt to 8 million mt, Oil Companies Advisory Committee data showed.
–Haris Zamir, newsdesk@spglobal.com
–Edited by Wendy Wells, wendy.wells@spglobal.com
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