KARACHI: Pakistan Refinery Limited (PRL) has started its isomerisation plant which is set to double the refinery’s monthly petrol output from 12,000 to 24,000 tonnes, which means an additional production of 16 million litres.

The plant, which started on June 26, would convert naphtha into petrol and is expected to save an annual $12m to $14m (on the basis of current prices) of foreign exchange to the national exchequer by import substitution.

Aftab Husain, PRL managing director, said the total cost of investment in the isomerisation plant is $50m. The additional production would hit the market by the end of next month and would help in narrowing the petrol deficit in the country, he said.

He said this is the first modular plant of UOP/Honeywell, USA, in Pakistan. It was scheduled to be completed in August 2015.

The plant was built in the UAE and shipped to Karachi for on-site installation. The entire engineering, procurement and construction (EPC) phase took 20 months, whereas the typical time frame for conventional plants of this size and complexity is around 30 months, he said.

Pakistan started importing petrol with 127,385 tonnes from 2007-08. Since then the volume of imports has continued to swell, touching 2.838m tonnes in July-May 2014-15 due to demand and supply gap and increasing use of petrol because of CNG shortage.

From 2007-08 to July-May 2014-15, petrol imports hit new highs. A record 349,386 tonnes were imported in April 2015.

Moreover, decline in the price of petrol, from Rs108 to Rs78 per litre in almost a year, also encouraged buyers to go for the fuel. Rising generator imports is another reason behind the spike in demand for petrol.

Increasing car and bike production followed by frequent arrivals of imported cars, especially 660cc, have also helped boost petrol demand.

Imports constitute 65-70 per cent of Pakistan’s petrol demand. The remainder is met with the help of local refineries.

Refineries are producing 130,000-135,000 tonnes of petrol per month out of total sales of 4.2-4.4m tonnes expected in the current fiscal year. Actual sales of petrol rose to 3.865m tonnes in 2013-14 from 1.183m tonnes in 2005-06.

The Oil Companies Advisory Council (OCAC) on its website had forecast demand for petrol at 4.638m tonnes in the outgoing fiscal year, which would go up to 5.333m tonnes in 2015-16, 5.867m tonnes in 2016-17, 6.453m tonnes in 2017-18 and 7.1m tonnes in 2018-19.

Published in Dawn, June 30th, 2015

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