The government gave the instruction after NOC refused to comply with Ministry of Finance´s previous instruction -- hike the fuel prices -- to discourage consumption, stated an official, adding that it was aimed at addressing rising imports and soaring trade deficit.
Petroleum product is among the top import items of the country. Although petroleum imports during the first four months of 2009/10 has not swelled even to the level of the same period last year, but given the rise in domestic demand and soaring crude prices, officials said they are worried it could leave devastating impact on economy.
NOC, however, has expressed its helplessness in this connection as well. During its recent interaction with senior MoF officials, NOC stated that demand for diesel has jumped by 100 percent, petrol by 80 percent and cooking gas by 50 percent in the market.
“On top of that, we have still not been able to maintain normal supplies. Besides, we need to build stock as well,” said Digambhar Jha, managing director, NOC.
Worse still, the international prices of fuel is on a growing track, meaning that the country will have to spend more for importing even the same volume of fuel.
Because of rising demand, NOC in December imported 88,000 kiloliters of petroleum products, which was more than 50 percent of what it imported in the same period last year. And rising international price forced it to pay Rs 4.12 billion for it.
“How can I slow down import when such a huge import too failed to quench the fuel thirst of the market?” wondered Jha. If the government really wants consumption to go down, he said, the government should knock on the doors of Transport Ministry.
Given the rise in consumption and prices, Jha told myrepublica.com that NOC estimates its monthly imports to touch Rs 5 billion in January, whereas its imports for August 2009 was just Rs 3 billion.
And this growth will hold not just for January. At the present rate, NOC officials said, they estimate monthly imports to cross over Rs 5 billion till mid-May.
“Extended power cut hours have already soared diesel´s demand by over 200 KL a day. Given that it is just the start of load shedding, we anticipate diesel´s demand to double up next month,” said another NOC official.
Apart from load-shedding, boom in construction works - both at the individual and public level - too has put pressure for higher imports.
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