By AMANULLAH BASHAR
Oct 08 - 14, 2001
Tariq Kirmani, having a rich experience spanning over
32 years in the petroleum sector, has recently taken over the charge as
the Managing Director of Pakistan State Oil (PSO), the largest oil
marketing company in the public sector. He had joined PSO as Deputy
Managing Director (Marketing) in April 1999 and took over as Managing
Director in July 2001. Currently, he is also serving as director of
Pakistan Refinery Ltd (PRL), Pak Grease, Attock Petroleum Ltd (APL) and
Chairman, Oil Companies Advisory Company (OCAC). He has the exposure of
working abroad in senior management positions especially in the United
States, the United Arab Emirates and Australia. Soon after completing
his Master's in Business Administration, Kirmani embarked upon a
rewarding career. His first association, which spanned over almost three
decades from August 1969 to December 1998 with that oil major where he
held senior management positions in Marketing, Operations and Financing
in Pakistan and overseas. In 1991, Kirmani became the first Pakistani to
be elected as a Company Director of that multinational oil company here
he served for 30 years.
PAGE: Being the chief of country's leading oil
market company what is your assessment about the fall out of the present
crisis on the petroleum sector in the context of the US and Afghanistan?
Kirmani: The present crisis like situation has
its multi-facet impact on the economy and among the most glaring impact
is the drastic cut in the sales of aviation fuel JP-1 due to
cancellation of flights by the International Airliners. An off-handed
assessment indicates drop in sales of aviation oil from 10050 tons per
day to 7500 tons, which shows a decline of about 25 per cent of the
sales at country's airports.
PAGE: Apart from the aviation sector, what is
the overall growth situation in the petroleum sector of Pakistan?
Kirmani: The oil consumption in Pakistan has
been declined sharply which sounds an alarmingly stagnant position in
the manufacturing sector. The drop in oil consumption during the third
quarter of 2001 is unprecedented indicating a 13.5 per cent negative
growth in the oil consumption, which is for the first time in this
history of this country.
PAGE: Don't you think that the noticeable drop
in oil consumption is due to switching over of various oil consuming
sector such as power generation, cement and other industrial concerns
from oil to gas fired system?
Kirmani: The switching over may be one of the
factors but you see that except a few companies majority of the
industrial sector still running on fuel oil therefore natural gas has
not a big role in the decline of the oil consumption, in fact it is the
overall recession which has led to the current situation. Oil demand
started declining from July 2001 while the noticeable fall in oil
consumption came in September after the terrorist attacks at the
economic center of the United States i.e. the World Trade Centre. In the
nutshell the drop after terrorist attack is estimated around 3,25000
tons of various petroleum products.
PAGE: The US threats for striking Afghanistan
has created apprehensions for international airliners as well as ocean
going vessels calling at Pakistan ports. If the situation worsens how
long the oil stocks in the country can survive?
Kirmani: The storage capacity for petroleum
products in Pakistan is capable to keep on supplying for 20 days. If the
oil shipments continue to call on Karachi ports there is no reason for
any apprehension, however, if the sea communication disrupts it may
naturally bring problems. The absence of any contingency plans in the
oil sector is formidable and calls for an immediate attention. PSO
however has the distinction of having the largest storage capacity,
which are about 79 per cent of the total available storage facilities in
PAGE: People generally complain that the
benefit of the drop in international oil prices is not passed on to the
consumers while the rise in prices is usually hit the pockets of the
Kirmani: While justifying the pricing system
said that time of oil purchase and delivery makes all the difference.
Today's price in the international market cannot be introduced as the
oil purchased during the period when the prices were on the higher side.
Hence it is a matter of loading and unloading timings. Regarding overall
price components, he said that 51 per cent of the petrol price based on
government levies while 25 per cent on diesel and furnace oil and black
oil which goes to the government kitty.
PAGE: Development surcharge is one of the
major components in the oil prices can you elaborate how and where the
money coming out of development surcharge is being utilized for the
development of the petroleum sector?
Kirmani: The money collected under the head of
development surcharge goes in the government kitty. In fact the
collection goes to the ministry of finance as a part of the government