ISLAMABAD, March 14: The government has directed Wapda and independent power producers (IPPs) to significantly build up their oil stocks for avoiding loadshedding in the coming summer.

The Economic Coordination Committee (ECC) of the Cabinet had taken the decision last week when it was informed that the country’s largest refinery, Parco, would remain shut for about a month — March 13 to April 11 —for maintenance. The meeting was presided over by Prime Minister Shaukat Aziz.

A petroleum ministry official said crude oil supplies normally utilised by Parco for production of various products had already been diverted to other refineries.

Sources in the finance ministry said that Parco represented more than 40 per cent of country’s refining requirements by refining about 100,000 barrels per day. Its closure would substantially reduce diesel and furnace oil production that “will be met by other refineries and through imports”.

The sources said that IPPs and Wapda had been asked to immediately start building up their oil stocks to minimise the impact of electricity shortage.

Wapda and IPPs were also asked to postpone their maintenance and repairs over the next few months to help the government minimise the impact of shortages.

The ECC was informed that average coverage in Feb 2007 stood at 24 days compared with last year’s 21-day coverage.

The government is already firming up plans to increase national strategic stocks to about 60 days.

Pakistan’s furnace oil consumption is estimated to rise this year by about 80 per cent owing to higher electricity demand mainly in the Wapda system that also includes IPPs. This alone is expected to increase oil import bill to $7.5 billion against budgeted estimates of $6.5 billion.

Last year’s oil import bill amounted to about $6.5 billion compared with $3.5 billion in 2004-05, mainly because of higher international oil prices -- a burden expected to be even higher in future as a result of growing Middle East crisis.