Karachi: The Advisory Council for Oil Companies (OCAC) said that Pakistan refineries produce diesel in accordance with the specifications notified by the Ministry of Energy (oil division) and have invested substantially to improve fuel standards.
The OCAC strongly refuted a report published Tuesday in the news, which was based on a letter from the Oil Marketing Association of Pakistan (OMAP), concerning the quality of high -speed diesel.
“The report denies the quality of high -speed diesel (HSD) produced by local refineries and reflects amateurism, because it is devoid of facts. It seems to have been written with acquired interests and does not provide a precise image of the local refining sector,” said the OCAC in response to OMAP’s letter.
The Council stressed that local refineries are strategic national assets, playing a crucial role in the energy security and economic development of Pakistan. The suggestion that diesel imports are necessary due to poor local quality have been described as misleading. The refineries in Pakistan, they have repeated, produce diesel in accordance with the specifications notified by the Ministry of Energy (Division of Oil). Importing a single cargo of HSD costs around $ 45 million in currencies – unnecessary load when adequate local supplies are available.
Over the years, refineries have invested in upgrading projects, in particular capacity expansions and the installation of isomerization and hydro-disulpourization units (DHDS), allowing them to improve fuel standards. The Council added that Pakistan refineries are currently producing HSD with a sulfur content ranging from Euro I to Euro V. A refinery already produced from compatible Euro V diesel, two Euro III supplies, and the rest produced from diesel with a sulfur content of around 5,000 ppm – much lower than the figure of 10,000 ppm of 10,000 ppm. In particular, even the refinery producing Euro V diesel faces challenges with the elevation of products due to the incoherent deconstitution of certain companies, resulting in operational difficulties.
The OCAC noted that the delays in the implementation of the refineries policy on the brownfields 2023 affected the upgrading deadlines, a question already known to the authorities. Once the upgrades are finished, all local refineries will provide Euro V fuel.
The Council also declared that the pricing of the products remains aligned with the specifications, because the refineries producing a sub-dud sub-sub-sistero are subject at a differential cost. This cost is recovered from refineries that do not produce HSD in accordance with government / import specifications. The amount recovered is incorporated into the margin of inner equalization of freight (IFEM) and transmitted to consumers, guaranteeing that there is no additional financial charge for local consumers due to differences in specifications.
The OCAC stressed that refineries operate under regulated license conditions, and it is obvious to any faithful citizen that local production cannot be fairly compared to imports, because a trade deficit focused on excessive imports harms the economy. The Council also underlined that a large part of the transport and agriculture sectors of Pakistan does not require Euro V diesel, which makes local notes both appropriate and effective for market needs.
Finally, he identified fuel smuggling lower than the market as the real threat to product quality and market stability. The OCAC added that all the information is available with OGRA concerning certain companies that have made no local purchase for almost a year and have interrupted HSD sales of their retail networks.
