Govt mulls shutting all but two oil refineries.

Following a reduction in production by oil and gas exploration companies, the government is mulling over a plan to operate only two refineries - Attock Refinery Limited (ARL) and Pak-Arab Refinery Limited (Parco) - while shutting down the other three refineries for a couple of months.

The move is being considered following a slump in demand for petroleum products in the wake of coronavirus-induced lockdown in most parts of the country.

Parco uses imported and locally produced crude oil whereas ARL mainly operates with local crude oil.

The demand slump has already led to the closure of National Refinery Limited (NRL) and Byco Petroleum. ARL has also shut down its main unit, which has resulted in a sharp decline in crude oil, gas and liquefied petroleum gas (LPG) production by exploration companies.

Sources told The Express Tribune that the Petroleum Division had prepared a summary to seek approval of the Cabinet Committee on Energy (CCOE) in an upcoming meeting, likely to be held on Thursday.

Under the proposed plan, ARL and Parco would continue their operations whereas the other three refineries - Byco, Pakistan Refinery Limited (PRL) and NRL - would be shut down for two to three months. In this regard, a summary has been prepared for the approval of CCOE.

The government cannot afford the closure of ARL as it operates on locally produced crude oil. In case it is shut down, several fields of oil and gas exploration companies will also have to be closed.

Parco, a joint venture between the UAE and Pakistan - will also continue operations. The government has already banned the import of crude oil and petrol.

'But there is no increase in demand and we are just surviving on an hour-to-hour basis. You know that NRL and Byco are already shut. ARL has also shut down its main plant. Parco is getting back on line,' said the PRL managing director.

Meanwhile, ARL chief executive officer, in a letter sent to the Petroleum Division, said despite the assurance given by the government, there had hardly been any improvement in product demand.

Only Attock Petroleum has lifted petroleum products whereas no other Pak-Arab Refinery Limited (OMC) has bought any significant quantity from the refinery.

He said given the overall situation, they would have to shut down their main unit just to cater to the heavy crude oil produced by the Potohar/north region. 'We would partially be operating for the next few days after which crude oil stocks will top up and a complete...