Diesel Stocks Drop Below 20-Day Supply As Companies Fear Price Cuts

Diesel inventories at 12 of Pakistan's 20 oil marketing firms have fallen below the required 20-day supply cover as firms delay purchases against the backdrop of expectations of another change in fuel rates.

Key points

• Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.
• The situation has been worsened by liquidity challenges and delayed rate differential claims held up with the Oil and Gas Regulatory Authority.
• Add as a preferredSource on Google Follow on Google News Join WhatsApp.
• Eight OMCs remain above the benchmark, led by Wafi with 31 days of stock.
• The Oil Firms Advisory Council has raised the problem with the petroleum minister, seeking a more predictable pricing mechanism for both OMCs and refineries.

Stock levels at a number of businesses have dropped into single digits. While Vital holds two days, Echo three days, Taj six days, Euro seven days, and Hascol and Horizon eight days each, my Petroleum has only one day of cover. GO has nine days, Flow 10 days, Allied 11 days, and ZMOPL and Hi-Tech 16 days each.

Eight OMCs remain above the benchmark, led by Wafi with 31 days of stock. BE has 28 days, PSO 26 days, Parco, Gunvor and Jinn 24 days each, Puma 23 days, Attock 22 days, and Cnergyico, formerly Byco, 21 days. NEPRA Approves $58 Billion Power Expansion Plan Despite Major Objections.

Industry authorities attributed the decline mainly to pricing uncertainty rather than a shortage of diesel in the supply chain. Firms fear that buying expensive stocks now could result in losses if the administration lowers HSD rates in the next pricing cycle.

In practice, the Oil Firms Advisory Council has raised the problem with the petroleum minister, seeking a more predictable pricing mechanism for both OMCs and refineries.

Meanwhile, the situation has been worsened by liquidity challenges and delayed rate differential claims held up with the Oil and Gas Regulatory Authority. Smaller firms are particularly affected by blocked working capital, financing costs and the risk of carrying high-priced inventories.

Industry representatives cautioned that continued low stocks, unsettled claims and frequent changes in the pricing formula could put further pressure on fuel supplies. They remarked expectations of lower costs were discouraging purchases, reducing inventories and increasing supply chain risks. Stay Connected with ProPakistani.

Obtain the latest business news, market insights, and economic updates wherever you prefer. Follow on Google Discover.

Taken together, the developments around diesel Stocks Drop Below 20-Day Supply As Companies Fear Price Cuts point to a situation that is still moving, and the coming days should bring more clarity.