Meeting on refineries’ upgrade in Petroleum Division: All refineries in huge loss, seek bailout package for survival

ISLAMABAD: In a new development, Pakistan’s refineries have conveyed to the government in plain words that they are left with no option but to shut down their operations because of the mammoth adverse impact of COVID-19 on oil industry across the world owing to which crude oil prices went down into the negative zone and the losses they braved in the last nine months.

However, if the government wants to keep the industry afloat, then it must come up with a bailout package for refineries, as out of five, three refineries have shown their financial results according to which they braved over Rs16 billion losses in the last nine months and the rest are also in the loss but they would announce this in the days to come. The losses will soar when result of refineries from April onwards start coming in.

The Managing Directors (MDs) of five refineries that include National Refinery Limited (NRL), Attock Refinery Limited (ARL), Pak-Arab Refinery (PARCO), Attock Refinery Limited (ARL) and BYCO in a meeting held here on Thursday with Special Assistant to PM on Petroleum Nadeem Babar in the chair told him in plain words that they were going to close down the refineries because of the huge losses they faced and their survival was not possible unless and until the government comes up with a bailout package as it has extended it 0to other industrial sectors on account of COVID-19 spread, a senior official who was also part of meeting told The News. The meeting was, he said, was basically convened by SAPM on Petroleum Nadeem Babar for the upgrade of refineries under long term strategy, but the refineries agitated the issue of their survival because of the situation emerging out of COVID-19 and the losses they braved in the last nine months period ending March. The meeting participants were also told by refineries’ top management as saying that the price of petrol has come to equal to half of crude oil price and diesel price is now equal to crude oil price and from May 1, 2020, more decline in prices will ruin the refineries.

The government side headed by Nadeem Babar, the official said, asked the refineries to come up with proposals for bailout package on their own which is inevitable for their survival and bring them to the government for brainstorming and fine-tuning after input from the Petroleum Division and Finance ministry.

"Refineries are the strategic assets of the country and they cannot be left in the lurch," the official while quoting the top officials in the meeting told The News. The government side in the meeting pended the refineries’ upgrade issue till the situation gets normal.

The government side in the meeting was told that PARCO, National Refinery Limited and Byco are non-operational at the moment while National Refinery Limited is running at 50 percent of its capacity and Attock Refinery Limited is running at 29-30 percent of its capacity just to assure that the northern oil fields did not close down.

The tanks and storages of all refineries are virtually topped up and they have no room to operate further as the oil marketing companies (OMCs) are not lifting the POL products in the wake of low demand in the market.