Byco halts production as oil demand falls

Decision taken to reduce glut, create space for locally produced crude

KARACHI: Pakistan’s largest oil refinery, Byco Petroleum, has suspended production of petroleum products as consumer demand dropped drastically following a lockdown enforced in many parts of the country.

“Byco puts its refining complex on cold circulation due to a lack of POL (petroleum, oil and lubricants) demand,” the refinery announced on Monday. “Byco’s refinery can be restarted within hours,” it stressed in a statement. The step of temporarily halting production has been taken in a bid to reduce the current glut and create adequate space for locally produced crude and condensate.

“We anticipate that demand will pick up soon,” it said.

The refinery has installed production capacity of 155,000 barrels per day, which converts crude oil into various saleable products such as liquefied petroleum gas (LPG), motor gasoline (petrol), kerosene oil, jet fuels, high-speed diesel and furnace oil.

Earlier, the government directed all oil marketing companies (OMCs), including Pakistan State Oil (PSO) and Shell, to cancel orders for import of refined products with effect from April 1 and take supplies from domestic refineries.

The government took the step to support the country’s refineries in continuing their operations as demand plunged in the wake of coronavirus pandemic.

Earlier, some other refineries stopped production of petroleum products to cope with the situation emerging due to higher prices of their products compared to imports, reduction in power production by furnace oil-based plants and non-stop production of outdated products with ageing technology.

Pakistan’s oil refiners - Byco, Attock Refinery Limited (ARL), National Refinery Limited (NRL), Pakistan Refinery Limited (PRL) and Pak-Arab Refinery Limited (Parco) - have been termed essential services by the Ministry of Energy’s Petroleum Division in a recent order.

The division called on law enforcement agencies that all the refiners across the country must be allowed to continue uninterrupted supply of their products.

It guaranteed free movement of the industry’s employees, vendors and contractors to ensure the availability of petroleum products at all filling stations across the country amid the lockdown.

“Byco is hopeful that OMCs will act upon the MoE’s directive to stop importing POL products and increase offtake of petroleum products from domestic refineries,” Byco Petroleum Vice President Commercial Fayaz Ahmad Khan said in the statement.

“Byco appreciates the Ministry of Energy’s proactive steps and supports the GoP’s stance of prioritising consumption of domestic crude oil and condensate, keeping domestic refineries operational and minimising import of POL products,” he added.

The country’s refining industry stands shoulder to shoulder with the nation to persevere in tackling the challenge of COVID-19 pandemic. “We pray and trust that Pakistan will emerge stronger after successfully countering the pandemic,” he concluded.

Published in The Express Tribune, March 31^st, 2020.

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