Local oil refineries in Pakistan close as demand slumps

Islamabad: Attock Refinery Limited has closed down its largest plant, which is capable of refining a minimum of 26,000 barrels of crude oil per day (bpd), over the lack of demand in the country.

The refinery’s top management, in a letter written on Monday to Secretary Petroleum Division, Mian Asad, informed the government that oil marketing companies (OMCs) have not bought products from the refinery, forcing ARL to close the plant, The News reported.

A copy of the letter, cited by The News, said that the refinery, which earlier closed down two of its smaller units, has now made the smaller plants partially operational to refine 12,000-13,000 barrels per day for the next two to three days.

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The government in the wake of a massive cut in the demand of petroleum products because of countrywide lockdown, had imposed a ban on OMCs from importing petrol and crude oil by refineries from April onward.

The letter further read that in view of the unfortunate situation, the top management of the refinery would be shutting down its Main Unit today on Monday (March 30). And just to cater to the heavy crude oil produced from the Potohar Northern region and Khyber Pakhtunkhwa, it would be partially operating for the next few days “after which our crude oil storages would also top up and complete shutdown of the refinery is imminent”.

The government had last week restricted the import of crude oil and asked OMCs to procure refined oil from local refineries to cater to the needs of the citizens living in the northern areas of Pakistan so that local companies are not forced out of business by the coronavirus crisis.

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If it closes, which seems imminent, it would be the third refinery in the country to halt operations because of the collapse in demand as the government implements a lockdown to try to limit the spread of the coronavirus.

On Saturday, the country’s largest refiner Byco Petroleum Pakistan Ltd halted crude processing at its 155,000 bpd refinery because of “zero demand for products in the aftermath of COVID-19 lockdowns.

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