Gross mismanagement: Excessive import of FO constitutes a threat to refinery sector: Zahid

KARACHI: Chairman of National Business Group Pakistan and President Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has said there was a shortage of gas in the country but furnace oil was freely imported, wasting valuable foreign exchange.

There was no shortage of furnace oil in the country but despite the abundance huge quantities of furnace oil, it was imported triggering a crisis which is a glaring example of mismanagement, he said.

Mian Zahid Hussain said that there is no more capacity to store furnace oil in the country which is leading to the closure of refineries which is a matter of concern.

He said that action should be taken against those responsible for this mismanagement which resulted in colossal losses to the national exchequer and refineries.

He said that large quantities of furnace oil (FO) imports have resulted in low sales of various refineries and they were shutting down their operations.

To overcome the crisis, refineries are now being pressured to export the surplus furnace oil which will be a huge loss to them.

He noted that various refineries have expressed fears of a serious crisis even before the furnace oil import but no one listened to them, which is amazing.

Mian Zahid Hussain further said that dues are also not being paid to IPPs due to which they have reduced the purchase of furnace oil from refineries which is aggravating the crisis.

Some IPPs are buying imported furnace oil which is increasing the problems for the local refineries and is also affecting the production of kerosene, petrol, and diesel and lube base oil. The country is also facing scarcity of lubricants.

He said that on the orders of the Power Division, PSO has imported 120,000 tons of furnace oil which reached Pakistan in two ships on November 13 but it has not been unloaded yet and PSO has to pay almost $25,000 demurrage daily.

At present, the stock of furnace oil in the country has reached 300,000 tonnes while the demand for electricity has come down to 10,000 MW which has affected the sales of furnace oil, he said.

Billions of rupees have been lost due to this mismanagement which should be investigated, he demanded.

Copyright Business Recorder, 2021