Rising oil price is a cause of concern for all the South Asian countries including Pakistan. For Pakistan, the situation is not good as Pakistan needs more and more oil to sustain its high economic growth. Unfortunately, in the international market, the price of oil is very high and it is not stable either. So, Pakistan government is now contemplating on the idea of having an oil reserve of 60 days. Right now, oil reserve of 20 days is kept. Pakistan Link reported:
“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.”
It is good plan and many people in Pakistan would be happy. No one wants to see instability in the supply of oil. However, keeping a 60 day reserves is an expensive matter too. Then Pakistan will have to spend extra cash engaged for this matter.
What is your idea about it?
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