Summary From Nov 1 to Nov 21 only, 69,000 metric tons or 3,285 metric tons per day of furnace have been sold
(Dunya News) – Pakistan oil refineries sent a SOS to the Ministry of Energy saying the throughput has reached 60 percent to 70pc because their tanks have topped up with furnace oil with no ullage, permission require otherwise all supply chain of petroleum products would likely to be derailed.
Oil Companies Advisory Council comprising of Pak Arab Refinery, Attock Refinery, National Refinery and Pakistan Refinery sent separate letters to Ministry of Energy giving warning that the government should take a holistic view of the whole situation as continuous pile up of the furnace oil will break down the refining of other petroleum products resulting in shortage across the country.
From November 1 to November 21 only, around 69,000 metric tons or 3,285 metric tons per day of furnace have been sold by the oil marketing companies as such all refineries have already slowed down and are generally operating at their lowest levels and are heading towards imminent shutdown, the letter of Oil Companies Advisory Council said.
The industry/refineries have already proposed a general guideline that a minimum of 10,000 mtons or 300,000 mtons per month of furnace oil should be made mandatory part of energy mix for power/electricity generation to take care of local refineries production uniformly throughout the year irrespective of seasonality.
“Refinery closure at this stage will have serious ramifications”, Pak Arab Refinery said in a letter. It will break the product supply chain, resulting in serious shortage of products in the country, with immediate dry outs of motor gasoline, JP-1 and JP-8 supplies to Pakistan Air Force and disruption in local crude disposal, the letter said.
PARCO produces around 160,000 mtons of diesel, 75,000 mtons of motor gasoline and about 30,000 mtons of Jet fuel for PIA and Pakistan Air Force (PAF). In case of shut down, these quantities are impossible to be imported in time, keeping in view their delivery periods and limitations at the ports, the letter said.
Pakistan Refinery operating at bare minimum capacity, if the situation so persists, the refinery will have no other option but to shut down the refinery in the next 10-15 days. The closure will not only affect the supply of petroleum products but will also hamper crude oil/condensate receipts from different fields.
According to an oil analyst in October the industry imported around 146,393 tons of furnace oil and another 68,153 tons cargo arrived on 18th November, “it s beyond comprehension why furnace oil was imported when even local refineries were finding it hard to sell local production”, he said.
Pak Arab Refinery said the Ministry needs to take a holistic view of the whole situation before the petroleum products supply chains break down. “We should not only be looking at the margin all higher cost of furnace oil as compared with LNG, we should be looking at the horrendous cost of the dry out and the inevitable civil commotion that will follow in the country.
