News
Monday, October 16, 2006
Pakistan plans to increase oil reservesISLAMABAD: Pakistan has decided to increase its strategic oil reserves from 21 to 60 days of consumption to ward off security, commercial and economic concerns in case of an unexpected supply disruption.
Official sources said the government had not yet decided how it would increase strategic stocks of crude oil and petroleum products.
A number of issues emerged during initial discussions among stakeholders on the subject. The discussed issues such as imposing a tax to generate funds for the storage capacity and build-up of stocks, operations of these stocks and whether the stocks should be maintained by oil companies or by the government or by a new strategic stocks entity.
As a result of these issues, the government has sought the World Bank’s assistance to engage a professional consultant for a study on the subject, and to analyse the cost-benefit ratio of raising the stock level.
Sources said the objective of the study was to develop a framework for the development of strategic crude oil and petroleum products stocks, in accordance with official security concerns and international best practices. An official source said the bank had prepared terms of reference for the study. The source said that the total storage capacity of all installations and depots in the country amounted to only 21 days of consumption, which would be insufficient during a supply crisis. Increased stocks would be available for use both in case of price and supply interventions, and difficult situations. SANA
Courtesy DailyTimes.com.pk