Refineries call for revising petroleum policy
Industry official stresses on bailout package, fortnightly pricing to avoid oil crisis in future
ISLAMABAD: Refineries want the government to revise downstream petroleum policy, bailout package and fortnightly pricing to avoid severity of petroleum products shortage in future.
Due to the Covid-19 pandemic, the total inventory losses of the refineries sector in Pakistan surged to Rs34 billion in only March and April 2020. To put this in context, the combined financial losses of the four refineries in the country were Rs47 billion for the last two financial years ie; 2018-2019 and 2019-2020.
On top of this, the refineries for the month of June 2020 alone are losing about Rs17 per litre on sale and production of each litre of motor gasoline, yet providing the same only due to national interests, said Attock Refinery Chief Executive Officer (CEO) Limited Adil Khattak in a statement.
He said that due to these reasons the refineries have been forced to operate at low throughput. All these facts have been brought to the knowledge of the government and in this regard, urgent support has been sought to ensure sustainability of refinery operations. It must be noted that refineries should be enabled to run at 100% capacity to reduce reliance on imports.
He said that there is a dire need to review and analyse underlying reasons for present shortages of petrol in the country and look for a long-term sustainable solution, which includes revision of Downstream Petroleum Policy - the last one having being issued in 1997, fortnightly pricing, bailout package for the refineries and creating a conducive business environment in the country. He added that otherwise similar situation could arise with more severity in future.
He said that the business environment of the country during the last two years has remained very challenging and disturbing for oil refining sector in Pakistan.
Taking cognizance of the financial difficulties of the local refineries, the Ministry of Energy (Petroleum Division) had formed a Refinery Working Group to work out different plans for mitigating refinery losses and formulate a comprehensive policy framework for future refinery expansion and upgrade. Unfortunately, due to the Covid-19 pandemic, the progress got delayed.
Published in The Express Tribune, June 14th, 2020.
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