Why bail the refineries?

Not a month passes by and local newspapers are graced with pleas of different industries - urging the government to save them before they run aground into losses. Be it the spinning industry, the textile-value added sector or the automobile players - all have one thing in common i.e. their strategic importance to the country.
The latest addition on the list is the refinery sector, which is now seeking governments help in order to be saved from closing down completely.
What refineries are demanding is a fair and consistent pricing solution for their survival. But whats the problem? Well, some of them have not been making profits of late, owing to a host of reasons.
First and foremost, the refineries in Pakistan are just not good enough to compete at the international level which hurts their margins. Secondly, the devil of circular debt has hit them really bad.
"Refineries operation in Pakistan is not sustainable. The refining units are simple and 40 percent of the refined products yield negative margins - local refineries cannot compete because they are inefficient and small and need governments tariff support to sustain themselves", Chairman Pakistan Refinery Farooq Rahmatullah told BR Research.
Rahmatullahs views, however, are not seconded by all the industry experts as a sitting director of a leading refinery told BR Research, on the condition of anonymity that the plea of raising the tariff structure is based on false intentions and should not be granted.
"These refineries are already being subsidized in the form of 7.5 percent deemed duty...these are very inefficient hydro-skimming refineries which are considered crap anywhere else in the world...90 percent of the kind make losses in the world.. What strategic asset is it when you will get peanuts if you go out to sell them? It is much better to shut down the refineries and start importing" - believe it or not, this came from a director at a refinery.
It should be recalled that the refineries have collected billions of rupees in the form of deemed duty, aimed at improving the refined product quality. But, despite huge collection in this account and a time of eight years and counting - nothing of note has been done in regards to reducing the sulphur content from the refined products.
The refineries merrily kept on building the reserves in good times of profit making without ever complaining of an unfair pricing mechanism. It is only now, when some refineries have reported losses that the pricing mechanism stands unjustified and a threat to the industrys survival.
Surprisingly, the refineries want to be subsidized by the government despite knowing Islamabads fiscal constraints. If ever, their demands are granted, the burden is more likely to fall on the end consumers who are already paying deemed duty in the hope of a cleaner fuel - the chances of which happening are distant.
One may ask, why should the people pay for inefficient systems of the commercially run organizations. Interestingly, it is the very consumer who is also paying for the inefficiency for the power sector in the form of increased tariffs - refiners circular debt problems are a result of power sector inefficiency - surely, they shouldn be made to pay twice.