ISLAMABAD: Oil refineries throughout Pakistan have sought the federal government’s intervention for a bailout package, saying they are left with no option but to shut down their operations because of the adverse impact of Covid-19 on the oil industry, a media report says.
The virus spread in recent weeks and a price war between Gulf countries and Russia on crude has sent oil prices into the negative zone. As a result, refineries in Pakistan have braved severe price fluctuations, more so in recent months, resulting in huge losses.
According to the report, the refineries have told the government that if it wants to keep the industry afloat, it must come up with a bailout package for refineries, as out of five, three refineries have already braved over Rs16 billion in losses in the last nine months.
Two other refineries in Pakistan are also running huge losses that they plan to make public in the days to come. The losses will soar when financial data of refineries from April onward starts rolling in.
The Managing Directors (MDs) of five refineries- the National Refinery Limited (NRL), the Attock Refinery Limited (ARL), the Pak-Arab Refinery (PARCO), the Attock Refinery Limited (ARL), and the BYCO- in a meeting held on Thursday, told the government that they were close to shutting down.
The meeting, attended by Special Assistant to PM on Petroleum Nadeem Babar in the chair, was informed in plain words that the refineries were going to close down and their survival was not possible unless and until the government came up with a bailout package.
According to an official, the top management of refineries pleaded in the meeting that the price of petrol had come to equal half of crude, and the diesel price is now equal to previous prices of crude, with more losses expected in May.
The government side asked the refineries to come up with proposals for bailout package on their own, the official added.