ISLAMABAD: The government on Monday capitulated and principally decided to lift imported and domestic furnace oil for power plants to ease jet fuel crunch which has gripped the country since last week.
This development comes amids govt facing problems at second Liquefied Natural Gas Terminal and in a meeting on Monday held among power, petroleum divisions and the oil industry an understanding was reached to ease jet fuel crisis, but remains contingent on PM Shahid Khaqan Abbasi’s removal, reported Dawn.
The policy is expected to be given go-ahead by PM Abbasi within a few days. Sources revealed power and petroleum divisions of PM’s energy ministry would send a formal summary to Mr. Abbasi, which would permit power plants to lift furnace oil in stock with local refineries and those imported by Pakisan State Oil (PSO).
This decision will ease pressure on refineries which have been on verge of shutdown due to non-lifting of furnace oil and crippled production of JP1 and JP8 fuel for aviation industry and the airforce.
Not only has this caused demurrage costs to PSO but jet fuel import prices were Rs3-4 per litre higher than domestic prices. By Monday, furnace oil stocks crossed beyond 935,000 tones, which were enough for 65 days of average usage, while aviation stocks were around 11,000 tones equivalent to average consumption of around four days.
On a special case basis, this additional cost would have to be incorporated into product pricing by the authorities. PSO’s two vessels carrying low and high-sulphur furnace oil of 60,000 tons each were stranded at Karachi Port since November 28th, which was the state-owned entity $15,000-25,000 demurrage charges per day would also need to be added into the price.
A PSO spokesman stated its product sourcing had been enhanced via refineries and imports. He added the company was timely updating import plans in line with market demand and local refineries were already providing JP-8 fuel to defence authorities.
Furthermore, he shared PSO had ordered imported cargoes of Jet A-1 for meeting surging demand of jet fuel for Umrah flights and due to onset of holiday sea besides less supplies by local refineries.
