Observer Report
Rawalpindi
The Attock Refinery Limited, explaining the news report regarding shortages of petrol especially North of the country, has strongly refuted the impression as overall share of ARL in country’s motor gasoline supplies in less than 5% and has marginal impact on the country level.
ARL being located in the North of the country is the only refinery processing 100% indigenous crude and has been playing a proactive role and supporting government efforts by providing non-stop fuels supplies to the OMCs, said the press release by the ARL.
The strategic importance of ARL has been proven time and again by its ability to augment country’s defense by providing uninterrupted supply of refined petroleum products to the armed forces during the critical time of war and any other incident affecting petroleum supply chain.
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, Ministry of Energy (Petroleum Division) has formed a Refinery Working Group to work out different plans for mitigating refinery losses and formulate a comprehensive policy framework for future Refinery Expansion & Up-gradation. Unfortunately due to Covid-19 pandemic, progress got delayed.
Three out of country’s five refineries were forced to shut-down in March/April 2020 due to low demand of petroleum products in the country for which the government in good faith temporarily put a ban on imports as OMCs had sufficient stocks. This was primarily done to ensure that OMCs increase their off-takes from the local refineries so that operations of refineries are maintained at adequate levels. This ban on imports was subsequently lifted.
The total inventory losses of the refining sector in Pakistan due to Covid-19 in March & April 2020 alone stands at about Rs 34 Billion. On top of it, the refineries for the month of June 2020 alone are losing about Rs. 17 per litre on sale and production of each litre of Motor gasoline, yet providing the same only in National interests. Due to these reasons, the refineries are forced to operate at low throughput. All these facts have been brought into the knowledge of GOP and urgent support of Government 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.
