Pakistan’s Economic Coordination Committee (ECC) has approved a proposal from the country’s Ministry of Energy (Petroleum Division), to reopen the Kohat Oil Depot in northern Pakistan.
Reopening the depot will add 2 million L to Pakistan’s oil storage capacity. The meeting of the ECC, held on 2 June 2021, was chaired by the federal minister for finance and revenue, Shaukat Tarin. According to The Nation newspaper, renovation work to allow the depot to reopen will take around six months and cost PKR 3 million (€15,800).
The proposal to reopen the Kohat depot was made under the Inland Freight Equalization Margin (IFEM) mechanism. the IFEM is a cost incurred for the inland movement of petroleum products in Pakistan to maintain parity in the prices of petrol, diesel and kerosene across the country. The depot was closed in 2008 along with 16 others as part of efforts to discourage the dumping and misuse of IFEM products. However, shortages and the introduction of physical reporting systems have since led to the reopening of several. Pakistan’s Senate Standing Committee on Petroleum asked Pakistan State Oil (PSO) and the Oil and Gas Regulatory Authority (OGRA) to investigate reopening the depot.
The Kohat region is currently supplied by a depot in Peshawar, but transporting petroleum products from Peshawar involves lorries passing through areas with safety and security problems. As well as avoiding this, reopening the Kohat Oil Depot will reduce transport costs, improving the region’s supply.