Looming oil crisis ‘averted’: Govt releases Rs30 bn to IPPs

ISLAMABAD: A looming crisis of unavailability of petroleum products in the country has been averted as the government released Rs30 billion to independent power producers with a direction to lift furnace oil from refineries.

A senior official of Petroleum Division told The News that a huge crisis of POL products was in the offing as the refineries were stuck in operational crunch due to non-lifting of furnace oil by IPPs, rendering the refineries to slow down the production pace of petrel, diesel and kerosene oil.

“All refineries, including PARCO, BYCO, NRL and PRL, have recently written letters to the Petroleum Division alerting of POL products availability crisis because of non-lifting of furnace oil from their storages,” he said, adding that refineries storage facility has been saturated as IPPs were not lifting furnace oil, forcing the refineries to slow down the production and eventually shutting down the production process for the want of storage space.

Attock Refinery Limited (ARL) on Wednesday wrote a letter requesting the government to direct the IPPs to uplift its furnace oil and threatened to close down its first unit if the IPPs failed to lift the product in a week.

The ARL letter, a copy of which is available to The News, maintained that the furnace oil inventory has increased manifold and hardly 8-10 days of storage capacity was left. The IPPs are bound by their agreement to maintain furnace oil inventory for 30 days.

It further says the government asked the refinery on November 30 to increase the production of kerosene oil (KO), informing it that the country is left with only 10 days of its stocks, but the operational crunch hampers its production as the storage facility is saturated.

The letter also says that the situation indicates lack of planning and coordination between various sections of the government. Secretary petroleum confirmed to The News that the Power Division has released Rs30 billion to IPPs, asking them to lift the furnace oil stocked with refineries.

He said that in this regard a meeting was held under the chair of energy minister with secretary petroleum and secretary power to avert the crisis. It transpired in the meeting that the amount of Rs30 billion has been released to IPPs for lifting furnace oil. “This will help maintain minimum strategic stocks. Besides, oil refineries will continue producing POL products when the space is created,” asserted the secretary petroleum.