‘Gasoline demand to triple by 2025’
“There is huge demand for motor gasoline,” said Adil Khattak, Chief Executive Officer of the 45,000 barrels per day (bpd) refinery, at a conference organised by Argus. Khattak’s figures showed that domestic demand for gasoline is around two million tons and is to double to four million tons by 2020.
Demand for fuel oil will rise to 12 million tons by 2025, from the current level of 10 million and diesel to over 10 million tons from below nine million. “Fuel oil demand is rising due to higher thermal power generation,” said Khattak.
The country is heavily dependent on imports for refined oil product needs, as its five refineries produce a total of 12.93 million tons of oil products, while total consumption is over 20 million tons.
There are plans to add nearly 30 million tons of capacity through new refineries and upgrades, but Khattak said the government’s pricing mechanism for fuel has discouraged investments.
“Most of these projects are on hold. As long as this pricing issue is not resolved, the country will be dependent on petroleum imports,” he said. He added that in January, Attock planned to upgrade its refinery to help fill the gasoline deficit.
Most countries in the region, ranging from India to Indonesia, subsidise fuel sales with retail prices capped by the government to tame inflation – a move that can pare income for refineries and potentially threaten their investment plans.
Published in The Express Tribune, March 3rd, 2011.
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