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Sea ports reel under double-digit growth of oil demand

Monday, 18 June 2018 | 00:00

Sea ports are struggling to handle double-digit growth of oil demand in the country and they need befitting uplifts to reduce infrastructure deficit, industry officials said.

The officials said the ports are inadequately equipped to match a 33 percent annual growth of local oil industry. Oil imports have increased 32 percent in the past five years. Pakistan imported 18.1 million tons of petroleum products in 2013, which soared to 23.9 million tons in 2017. Approximately 20 cargoes are added up with an increase of every one million tons/annum, an import agent said.

“Due to the ports’ incapacity and various constraints, the increased traffic is resulting in congestions and demurrages, with severity increasing during monsoons and high-demand periods,” the agent added.

A port authority’s official acknowledged that there are various challenges, including capacity and storage limitations, infrastructure constraints for discharge of cargoes and product movement’s lead time to upcountry locations. “Often, the situation aggravates when oil transporters go on strike and supplies are brought to a halt,” the official added.

Nearly all the high-speed diesel and fuel oil are imported through Port Qasim. The congestion has further increased as motor gasoline has also started arriving at the port. The port’s oil jetty (Fauji Oil Terminal and Distribution Co.) can handle 15 to 16 vessels a month, whereas in peak demand months, the cargoes reach up to 20 to 22 vessels in a month.

An import agent said berthing of vessels was delayed by more than 1,500 days, thus resulting in demurrages, during the current fiscal year till May. Industry officials said the erratic fuel oil consumption by the power plants also results in delays in berthing of all other industry cargoes.

Too, there is a slow discharge of cargoes at the Keamari port due to old and dilapidated infrastructure and ban on development of storages. Imports of non-petroleum vessels at Keamari oil piers worsen congestions, according to the officials.

The delay in industry vessels berthing at Keamari has been more than 850 days in the July-May period despite availability of three oil piers, the import agent said. An analyst said movement in international oil prices is directly linked with congestion at ports as some market players responding to such price changes enhance orders, while overlooking local market demand for short-term gains.

The analyst said the situation calls for effective measures to meet the nation’s increasing fuel demands and avoid any dry-out of critical petroleum products as well as curb unfair trade. “Some steps in this direction could include connectivity of ports, development of shore tanks and countrywide storages, pipeline connectivity to upcountry locations for various products, enhancement in rail transport of petroleum products, up-gradation and development of ports handling capacity,” the analyst added.

A reduction in cargoes discharge time is also critically required by improving old infrastructure to improve the overall supply chain of petroleum products and timely berthing of imported cargoes arriving at the ports.
Source: The News

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