Pakistan Now Has Enough Petrol Reserves for 26 Days

Petrol stocks have risen to new historic highs with enough reserve to meet 26 days of consumption demand in the country, reported Express Tribune.

This development comes as refineries have warned of impending shutdowns due to the Independent Power Producers’ refusal to purchase furnace oil.

According to the report, petrol stocks have reached 26 days of requirement for the first time in Pakistan’s history. While current consumption trends expect consumers to utilize between 21,000 and 22,000 tons of petrol per day, a gas crisis is probable during the current winter season if refineries suspend plant operations as the IPPs refuse to lift furnace oil stocks.

It is pertinent to mention that the country has 600,000 tons of petrol stockpiled due to lower-than-expected demand and uncertain forecasts during winters. Consumer demand of 800,000 tons of petrol had been forecast by the oil industry for November, but consumption was remarkably lower than expected.

A refinery official told a national daily that if the prevailing issue remains unattended, refineries will begin closing down in the next three to four days, potentially disrupting oil and gas supply across the country.

Adding fuel to the fire, Chief Executive Officer Attock Refinery Limited, Adil Khattak, wrote a letter to the Director-General Oil (Petroleum Division), where he contended that the refinery’s supplies had not improved. Therefore, the refinery had no choice but to reduce production due to a lack of demand, and they would be forced to close distillation units one by one, eventually shutting down the entire refinery.

He expressed his dissatisfaction with the fact that large amounts of furnace oil were being imported instead of being acquired from domestic refineries. Regulators were not pressuring IPPs to buy furnace oil from the refineries and instead pressed the refineries to increase production of kerosene oil, he added.

In a separate letter, the CEO of Pakistan Refinery Limited (PRL), Zahid Mir, stated that the refinery’s furnace oil production was 7,109 tons in November 2021, while total procurement was 5,875 tons. Moreover, PRL produced 3,244 tons in December 2021, but there was no need.

He asked the Petroleum Division to look into the situation right away and push the power industry to increase furnace oil usage to reduce pressure on refinery inventories. He emphasized the importance of preventing refinery shutdowns to ensure a continuous supply of petroleum products, as well as supplies of high-speed diesel and motor spirit to oil marketing companies.