Attock Refinery Limited (PSX: ATRL), the only refinery in the north of Pakistan, announced the shutdown of two of its units due to low product lifting by oil marketing companies (OMCs) resulting in high petrol and high-speed diesel stocks.
ATRL informed the Pakistan Stock Exchange (PSX) through a notice on Tuesday that the dispatch pattern for the current month (December) had continued to remain depressed, as a result, stocks of Premier Motor Gasoline (Petrol) and High-Speed Diesel (HSL) had reached very high levels with little/no ullage in storage tanks, especially petrol.
“To manage the high stock of these products, we have shut down two of our crude distillation units temporarily to manage refinery operations. Accordingly, we would now be operating at a throughput of about 60%. This, if it continues, will result in curtailment of crude intake from oilfields with adverse effect on associated gas as well,” the notice read.
The refinery said that it had also informed OGRA that surplus inventories of products were available in the market to meet the demands.
It is worth noting that the news of Atock Refinery’s possible shutdown due to higher product stocks and lower lifting by OMCs has been circulating in the media since last week, but the refiner only informed the investors on Tuesday. This led to lowered stock price of the company and after the notification was sent to the PSX, the share price inched up by 1.81% to reach Rs 346.04.
Earlier, ATRL CEO Adil Khattak wrote separate letters to the petroleum minister and the Ogra chairman on December 7 and said that OMCs had been importing more petrol and diesel instead of lifting their allocated quotas from ARL, causing high stocks of these products at the refinery resulting in a loss of Rs 700 million per month.
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He urged the government to direct the OMCs to ensure prioritising of local product lifting over imports and other sources like smuggling in ARL’s supply envelope so that the refinery could operate at optimum throughput.
ATRL’s management revealed the sales figures for the last four months which showed that only 38% of petrol and 47% of diesel sold by OMCs in ARL’s sales envelope was lifted from ARL and the rest was brought in from local or imported sources.
ATRL processes 100% of indigenous crude oil from the Khyber Pakhtunkhwa and Potohar regions.
