Contrary to expectations of all categories of consumers, government has decided a modest decrease in the prices of petroleum product against the big crash in the price of crude oil in the international market. Apparent reasons for not passing on the proportional benefit to the people are likely fall in revenue from petroleum levies and lack of storage capacity for increasing the quantum of oil import on lower price hedging, for which finance division was reported to have started working on a proposal.
Over the past five decades, expansion in oil storages has never been a priority by successive governments. Oil and Gas exploration activities had been carried out in unelected governments during 1978-85 and 2000-02. Pakistan could have avoided petroleum crisis in 2015 had there been enough storage facility in the country. Unfortunately, lesson has not been learnt from that crisis either by default or design. Even in the present government, Petroleum Division is least bothered to conceive any programme of building storages for crude oil and petroleum products.
Crash and glut in the international oil market has always been a temporary phenomenon. A big spurt in demand for oil and gas is expected from 2021 and onwards. Permanent solution lies in streamlining oil and gas exploration activities in the country and building strategic oil reserves.
