ISLAMABAD: Five of Pakistan’s largest oil refineries on Thursday warned that increasing smuggling of petroleum products is threatening refinery operations and could eventually force production shutdowns if urgent action is not taken.
According to details, Pak-Arab Refinery Company, Cnergyico, Attock Refinery Limited, Pakistan Refinery Limited and National Refinery Limited have jointly written to the Oil and Gas Regulatory Authority (OGRA) regarding the issue.
In the letter, refinery officials stated that unless the smuggling of petroleum products is stopped, refinery production operations across the country could face serious disruption.
The refineries expressed concern that the illegal movement and sale of fuel products were affecting domestic demand for legally refined petroleum products, creating financial and operational difficulties for the industry.
The warning comes only weeks after Pakistan’s refinery sector reported record profits during the third quarter of the current fiscal year.
All listed refineries recorded strong financial performance during the period. The refinery sector earned profits of Rs43 billion during the third quarter of the fiscal year, compared with Rs6 billion during the same period last year.
During the first nine months of the current fiscal year, total profits for listed refineries reached Rs55 billion, compared with losses of Rs12 billion recorded during the corresponding period of the previous fiscal year.
Companies including Pakistan State Oil, Attock Petroleum Limited, Attock Refinery Limited and Cnergyico reportedly showed strong growth during the period.
Industry data also showed significant increases in petrol and diesel sales. Petrol sales reached 391,000 tonnes during the first nine months of the fiscal year, reflecting a 35 per cent increase, while diesel sales rose by 34 per cent to 789,000 litres.
Refinery officials have urged authorities to take immediate measures to curb smuggling in order to protect local industry and maintain stable fuel supplies in the country.
