KARACHI: Attock Refinery Limited (ARL) has been forced to shut down its main distillation unit due to lower availability of crude oil and weak uplift of petroleum products.
Adil Khattak, chief executive officer of Attock Refinery, told The News that the refinery is facing challenges on two fronts. On the supply side, ARL is operating at only 65-70 per cent of its design capacity due to reduced crude availability from northern oil fields in Khyber Pakhtunkhwa and the Potohar region.
On the demand side, its products, particularly diesel, are not being fully uplifted, as some oil marketing companies (OMCs) prefer to reduce inventories during periods of falling prices or, in some cases, supply imported products within ARL’s designated market area while managing to secure transport freight reimbursement from the IFEM pool.
Despite repeated protests by refineries, Khattak said the Oil and Gas Regulatory Authority (Ogra) continues to allow excessive imports instead of prioritising uplift from local refineries, as required under the Petroleum Rules. He added that Ogra also permits freight payments from the IFEM pool even when product is readily available from ARL.
On crude supply constraints, Khattak said ARL has been requesting the Petroleum Division for more than three years to allocate 5,000 barrels per day of condensate crude from southern fields, which is currently being exported as no other refinery is willing to process it. However, approval for the allocation has been delayed repeatedly on various grounds.
He noted that the inability to secure southern crude supplies has directly constrained ARL’s throughput, limiting the availability of petroleum products to OMCs and the armed forces — both critical to national energy security and balanced freight economics.
Khattak further said that detailed calculations show the cost of transporting finished petroleum products is nearly double that of transporting crude oil. As a result, the prolonged delay in approving ARL’s southern crude allocation over the past three years has led to significant additional costs for end consumers and unnecessary foreign exchange outflows due to increased imports of finished products.
