According to its latest notice to the Pakistan Stock Exchange, Pakistan Refineries Limited has intimated that it will remain shut for approximately 20 days, starting December 10th. The cause for this is the regeneration shutdown of the company’s refining units.
Pakistan Refineries Limited, is a daughter company of PSO and is one of Pakistan’s state owned oil refineries. Between its 2 refining units, PRL has the capacity of processing 50,000 barrels per day (bpd) of crude oil.
According to media reports, the Oil and Gas regulatory Authority (OGRA), instructed the PRL to hold off the shutting down of its operations till February 2023. Due to high demands of diesel in the current winter’s months, OGRA maintained that the company should shut down operations after the demand surge slows down. The decision was made after OGRA’S Oil Supply Chain Department examined the company’s request of shutting down.
Regeneration is an essential part of the life cycle of any refinery. Not only does it improve extraction, it also has positive impacts on the environment. However, it is an event that can be put off. Earlier last month, OCAC informed OGRA of a possible shortage of diesel in the coming months, a claim that was refuted by OGRA and the Petroleum Ministry. However, closing operations of PRL means a decline of almost 40,000 metric tonnes of diesel that would have otherwise been added in the stream.
While Pakistan faces a foreign reserves shortage and the state bank is adamant on not providing LCs to local importers. It would be imperative to see what strategy is adopted to import diesel, if this shortfall becomes significant. As of now, the petroleum ministry is confident that Pakistan’s reserves are more than sufficient to go through the winter season.
