Increased oil storage capacity: World Bank suggestion turned down
ARIF RANA
ISLAMABAD (March 10 2007): The government on Friday turned down World Bank's demand for increasing strategic oil storage capacity, saying that the idea "does not suit Pakistan" for two reasons ie huge investment, and its ultimate burden on the end-consumers. The World Bank had indicated that Pakistan would need Rs 14 billion to increase strategic oil storage to 30 days and Rs 25 billion for 45 days'.
A World Bank delegation had held a meeting with the authorities to press the authorities to take the idea in letter and spirit. The World Bank suggested that the government of Pakistan should impose a particular tax on oil sale and use the money so collected for building up the storage capacity.
The officials of the ministry of Petroleum and Natural Resources, who represented Pakistan during the talks, sharply differed with the World Bank's team. They were of the view that Pakistan does not see any reason to go for building up strategic oil reserves, which would need billions of rupees investment.
Sources said the World Bank delegation was told, in clear terms, that the government of Pakistan would not impose the new tax on oil consumers for building up strategic oil reserves for 30 days. The authorities were of the view that the benefit of the storage would go to downstream industry and it would spend more money to have more stocks.
Copyright Business Recorder, 2007