Fuel, power shortage looms as oil stocks plummet

[AZADPAKISTAN2009]

Falling oil prices world wide means reduction of oil prices in PAKISTAN ? Try ...C.....yapa government

 

[OrionHunter]

Low oil price shall be in fact a boast for power increase and not shortage? What kind of logic is that? Those responsible for this crisis shall be hanged.

Probably futures trading. Oil companies have bought oil earlier when it was about $70-80 a barrel. How can they sell now when oil has fallen to less than $45 a barrel? So they'll wait till the prices rise again to avoid massive losses. That's the real story.

 

[Sliver]

What prevents Pakistan from buying oil an gas?

 

[nvKyleBrown]

Probably futures trading. Oil companies have bought oil earlier when it was about $70-80 a barrel. How can they sell now when oil has fallen to less than $45 a barrel? So they'll wait till the prices rise again to avoid massive losses. That's the real story.

Very possible, but holding onto the oil will not save them. Every barrel they hold onto at $80/barrel is costing ~$0.30 per month to hold (interest). You're better off selling it off to cover the loans and getting back into the market with lower prices - continue making money to cover the losses you incurred in 2014. It could be a very long time before oil prices go back up. If you're keeping everything idle in the meantime, that's just lost revenue you can't ever recover.

 

[Kaniska]

This is a strange problem with Pakistan..I was thinking it should be other way around...How come low oil price will make your debt more???

 

[acid rain]

Probably futures trading. Oil companies have bought oil earlier when it was about $70-80 a barrel. How can they sell now when oil has fallen to less than $45 a barrel? So they'll wait till the prices rise again to avoid massive losses. That's the real story.

Buy from other sources at lower rates or negotiate a new contract ay lowered rates and cut down the loss.

 

[Rank]

agay dekho ye kuta numa Shair agay aur kitnay baray baray world record banata hey lag pata jayega is koom aur inkay choopnay waloon ko!

 

[Jango]

What the heck is going on in this country?

How can you suddenly run out of petrol? No planning, no foresight, no forecast...this doesn't just happen in a day, you get prior indications.

No petrol in Islamabad and Pindi. Only the select stations selling have huge lines.

 

[Gufi]

No petrol in Islamabad and Pindi. Only the select stations selling have huge lines.

selling at 90 plus in Lahore... on the other hand new excuse petrol nahi mila is epic

 

[Jango]

Probably futures trading. Oil companies have bought oil earlier when it was about $70-80 a barrel. How can they sell now when oil has fallen to less than $45 a barrel? So they'll wait till the prices rise again to avoid massive losses. That's the real story.

Actually with the kind of thieves we have in Pakistan, this does seem a possibility.

 

[Dr. Strangelove]

government of the corrupt for the corrupt by the corrupt what else you can expect from thiefs ?

 

[Rank]

Incompetent PMLN regime ruling the state from past 20 - 25 years

Corruption, Kickbacks and Bad Planing in Metro Project
Corruption, Kickbacks in LNG
Corruption, Kickbacks in Gas Projects
Corruption, Kickbacks and Bad Planing in Neelum Jhelum hydr. Project
Corruption, Kickbacks in New Islamabad Airport
Bad Planing in CNG
Bad Planing in Fuel
Bad Planing in Traffic alternative routes btw every project

 

[niaz]

Very possible, but holding onto the oil will not save them. Every barrel they hold onto at $80/barrel is costing ~$0.30 per month to hold (interest). You're better off selling it off to cover the loans and getting back into the market with lower prices - continue making money to cover the losses you incurred in 2014. It could be a very long time before oil prices go back up. If you're keeping everything idle in the meantime, that's just lost revenue you can't ever recover.

Honourable Orion Hunter has put the finger on the problem. It is not the question of holding on to the high cost oil, if the prices are falling every day, later you buy the oil, the cheaper it is.

Let us say you buy the oil at $50 per bbl. By the time you bring it to Karachi and finally to the petrol station, the price drops to $45per bbl., you would have suffered $5 per bbl. loss without any fault of your own. PSO and other marketing companies are profit oriented. Suppose PSO declares Rs 20-billion loss, whom do you think general public & the shareholders, will blame?

It is the Gov’t job to control & manage such extreme circumstance, but you need competent & powerful ministers. In a country where even the checks issued by Gov’t authorities get bounced, one would be naïve to expect GOP to efficiently manage a complex situation such as drastic fluctuation in the international oil prices.

 

[nvKyleBrown]

This is a strange problem with Pakistan..I was thinking it should be other way around...How come low oil price will make your debt more???

If you signed a year long contract to buy oil at $90/barrel back in June2014, you're in deep trouble right now.

 

[Bagha]

Fuel stock won't plummet.
Why? To know that you'll have to go deeper into the cause of fall in oil price.
It is due to high production of oil. Why? Because no country is being able to conclude on who is to cut the production.
Thus no country is going to cut the production because everyone wants to stay in game. They have a huge stash of cash to continue this.
But if this continues for a long time and those cash stockpile dries, they we may see a cut in production.