ARL seeks 5,000bpd crude to enhance fuel production for defence

ISLAMABAD: Attock Refinery Limited (ARL) has asked for ensuring availability of 5,000 barrels per day (bpd) crude oil from Naimat field, a southern oilfield of United Energy Pakistan (UEP) that is already allocated to it and approved by Economic Coordination Committee (ECC) in February 2024, for more production of high speed diesel (HSD) and jet fuel (JP-18) to cater to the needs of armed forces.

Directorate General (DG) of Oil on behalf of the federal government wrote a letter on April 23 directing the refineries to produce more HSD for troops’ mobilisation and JP-18 for Pakistan Air Force.

In response to the DG Oil letter dated April 23, the ARL management drew the attention of the decision-makers in its letter written on Friday (April 25) to DG Oil asking for approval of freight rates of 5,000 bpd crude oil from Naimat field to the refinery at the earliest so that ARL could maintain the optimum production of HSD and JP-18.

As per the letter, the ARL management says the crude oil production from northern oilfields of the country has plummeted significantly and has reached a level of around 39,000 bpd prompting the management to operate the refinery at a lower throughput against the installed capacity to refine 53,400 bpd crude oil.

The letter reveals that ARL approached the Petroleum Division in May 2022 asking for allocation of 5,000 bpd crude oil of UEP Naimat field currently being exported, which was approved by ECC in February 2024 including its freight reimbursement through country IFEM ( Inland Freight Equalisation Margin) being more beneficial to the national freight economics. However, this decision could not be implemented due to delay in its approval.

ARL again submitted the revised freight rate for the movement of southern crude oil in September 2024 as per Public Procurement Regulatory Authority (PPRA) rules and is still waiting for its approval. “In view of the acute shortage of crude oil in our region and considering the margining security situation, it is all the more important that the revised freight rates for already allocated volumes of southern crude oil for processing at ARL is approved on urgent basis enabling the management to operate refinery at optimum level to cater to enhanced requirements of JP-8 and HSD.”

However, the top management in the letter vowed that despite the challenges of crude oil availability, ARL remains committed to providing maximum support to the armed forces.