ISLAMABAD: Local refineries reminded the Petroleum Division Thursday that they are supplying over 11 million MT per annum of various petroleum products but due to non-upliftment of furnace oil, owing to limited storages, the refineries are forced to reduce throughput/close the crude processing, which will affect the availability of all the other petroleum products eventually disturbing the already fragile supply chain.
In a letter to the Petroleum Division, the Oil Companies Advisory Council (OCAC) has highlighted that Oil Marketing Companies (OMCs) were allowed to import LSFO/HSFO during July-November 2021 on the firm demand placed by Power Division but non-upliftment of the committed quantities by Gencos/IPPs ensued stock buildup at OMCs storages and consequently the upliftment of FO from refineries was limited and stock buildup resulted.
This year substantial payments were released to IPPs and one of the conditions was that power plants will keep mandatory stocks as required by their fuel supply agreement with the OMCs.
Today, all the storages of power plants are empty and IPPs are maintaining two to three days stocks in storages and on the other hand, the refineries are planning to export FO at great financial loss.
This export will cripple the already overburdened port infrastructure and industry will face huge demurrages as well.
In view of the foregoing, as decided during the last fuel position meeting chaired by the Minister for Energy that the power plants will uplift FO for stock buildup and for consumption in case of exigencies, the Power Division is again requested to direct the power plants to uplift FO through PSO/OMCs immediately for stock buildup and provide payments/LCs to PSO.
Copyright Business Recorder, 2021