ISLAMABAD: Protesting over furnace oil imports instead of procurement from local refineries, Attock Refinery Limited (ARL) on Thursday expressed its inability to increase kerosene production and warned of gradual closure of its refining units owing to surplus stocks.
In a letter to the Ministry of Energy (Petroleum Division), ARL Chief Executive Officer Adil Khattak lamented that despite his warnings over the last two weeks, there was no improvement in the uptake of light and high sulphur furnace oil (LSFO/HSFO) from the refinery. Consequently, the furnace oil inventory at ARL — the country’s oldest and only refinery in the north — has increased manifold with hardly 8-10 days of storage capacity left.
“With no improvement in Furnace Fuel Oil (FFO) despatches, we are left with no option except to curtail our refinery throughput. In case there is no improvement in upliftment of FFO in next few days, we will be forced to shut down our distillation units one by one ultimately leading to total shutdown of the refinery,” the letter read.
The CEO said the company was surprised to note that huge volumes of FFO had been and was being imported on one hand and on the other hand the fuel from local refineries was not being uplifted.
“The IPPs which are bound by their agreements to maintain FFO inventory for thirty days are also not being pushed by the regulatory authorities to lift from local refineries,” Mr Khattak complained.
On the other hand, he said that at a time when refineries were heading towards shutdown, the Petroleum Division had asked local refineries on November 30 to increase production of kerosene oil as the country was left with only 10 days of stocks.
“The above situation points towards lack of planning and coordination rather disconnect between various sections of the government,” read the letter.
The ARL executive also pointed out that state-run Kot Addu Power Company (Kapco) had sufficient storage capacity to cater for ARL’s LSFO which should be utilised so that ARL can operate at optimum throughput and provide the committed volumes of POL products in its supply envelope.
With a view to sustain the entire crude oil supply chain and associated gas supplies from the oil fields, the ARL strongly demanded of the Petroleum Division for urgent intervention in giving directions to Pakistan State Oil, Kapco and other oil marketing companies for resuming supplies from ARL to ensure the refinery is able to operate “uninterruptedly”, failing which a complete refinery shutdown is imminent, Mr Khattak warned.
Reports suggest the other refineries have also warned the federal government about imminent shutdowns which could lead to petrol, high-speed diesel and jet fuel shortages.
Published in Dawn, December 3rd, 2021