Govt Releases Rs. 30 Billion to IPPs to Avert Oil Crisis

The government has released Rs. 30 billion to Independent Power Producers (IPPs) with a directive to lift furnace oil stocks from refineries to avoid pressures of an impending fuel shortage.

According to a report by a national daily, a massive POL product crisis has been ‘averted.’ Refineries were locked in an operational bind due to the IPPs’ refusal to lift furnace oil, compelling refineries to trim down production of petrol, diesel, and kerosene oil, it added.

As per details, the Power Division has issued Rs. 30 billion to IPPs, requesting them to lift the furnace oil stockpiled with refineries, according to the Petroleum Secretary.

He stated that a conference was convened in this regard under the chairmanship of the Energy Minister with the Secretary Petroleum and the Secretary Electricity to avert the issue. During the meeting, it was revealed that the funds had been released to IPPs for the lifting of furnace oil. This will assist in keeping strategic stock levels at the desired threshold. Furthermore, with desired capacity, oil refineries will continue to produce POL products, according to the secretary of petroleum.

Essentially, these developments come on the back of a looming crisis where the furnace oil inventory of oil refineries had exceeded with only 8-10 days of manageable storage capacity left.

The operational crunch hampered production because the storage capacity was full, prompting the Power Division to approach the IPPs to retrieve fuel stocks in this regard.