ISLAMABAD: Pakistan’s five refineries have braved mammoth inventory losses of Rs25.849 billion in just two months of March and April 2020 due to Covid-19’s adverse impact on oil industry across the world and more damage is also on the cards in the next two months of May and June, 2020. The refineries also told the government if they were not compensated, their survival will be at stake.
“The refineries that include the Attock Refinery Limited (ARL), National Refinery Limited (NRL), Pakistan Refinery Limited (PRL), Pak-Arab Refinery Company (PARCO) and BYCO have intimated about the huge losses in their proposal submitted to the Petroleum Division seeking bailout package to keep their operations afloat,” a senior official at the Petroleum Division told The News.
“ARL braved inventory loss of Rs7.753 billion in two months of March and April, NRL Rs4.525 billion, PRL Rs2.697 billion, BYCO Rs4.354 million and PARCO Rs6.520 billion due to reduced demand of POL products in the wake of COVID-19 spread.”
He said that the refineries have suggested to the government to provide temporary monetary support to individual refineries which will be subsequently returned. “Payment of monthly PDL (Petroleum Development Levy) which is due on 15th of every month is deferred for a period of six months, for each month starting from May, 2020 meaning that the payment due in May 2020 will be paid in November, 2020 and so on.”
In the proposal, the official said, the government has also been offered for transparency purposes to get audited the refineries claims about inventory losses by the statuary auditors by the respective refineries with a view to ensuring transparency.
The official, while quoting the proposal of refineries, said that due to Covid-19, prices and demand for petroleum products have drastically reduced, seriously impacting upliftment of POL products from local refineries and have adversely affected refineries’ profitability, which needs to be addressed on an urgent basis or the refineries’ survival is at stake.
One of the top executive officers of refineries, when contacted, confirmed saying that they had sent some days back their proposals to the government for inclusion in the bailout package on the demand of Special Assistant to Prime Minister on Petroleum Nadeem Babar to wriggle them out of the financial morass.
