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Fuel Crisis in Pakistan: Oil Companies Halting Operations to Produce POL Products

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Pakistan is going towards a major fuel crisis in the next three days. Oil refineries of Pakistan Byco, Parco, and oil marketing companies have warned the government that they will stop the production of POL products in the next three days. The reason is their storages that have fully topped up with furnace oil. They are now completely full.

Byco has written a letter on November 12 to secretary petroleum saying that its 1,20,000 tons capacity of refining crude oil is not finished. Also, Parco wrote a letter to secretary petroleum on Nov 13 telling that it has no capacity left for fuel products. So the companies have no choice but to halt the production of POL products. OMCs storages are full of furnace oil so where to store the fuel products?

Oil industry said that the closure of furnace oil-based power plants has led to this issue. It was a decision made by Prime Minister Shahid Khaqan Abbasi on October 27, 2017, to stop the running of power plants on diesel and furnace oil. He didn’t discuss it with oil companies and just closed it. The reason for taking this decision was to stop running expensive power plants and control the huge debt issue. Now the consequences of the decision are showing.

Finally, upon letters sent to authorities by Byco and Parco, a meeting was held chaired by secretary petroleum. Representatives of refineries, oil marketing companies, and oil companies’ advisory council were part of the meeting.

Oil Refineries have put forward their demand to the authorities in this meeting. They have asked the government to run the efficient furnace oil-based power plants on merit. They want that per day 10,000-12000 tons of furnace oil is lifted from local refineries. Otherwise, oil wells will close down. Secretary petroleum said that their demand will be taken to the power division for further discussion.

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