An insight into oil sector of Pakistan

Engineering Post Report

The consumption of petroleum products (energy products)  in Pakistan is 19.68 million tonnes per annum against  the supply of 11.59 million tonnes per annum from local refineries  while rest of the 8.9 million tonnes per annum is being imported. Pakistan imports $ 15-$16 billion worth oil annually.

The total refining capacity of the country is 19.37 million tonnes, however, the same is not being utilized fully on account of financial as well as technical problems. On financial side, the incumbent federal government has made concerted efforts after coming into power  to clear the   circular debt, however, the same has continued to rise.

On the other side, most of the refineries in Pakistan are old version except PARCO. Such refineries produce more than 40 per cent of Furnace Oil  which is the lowest price value product. A refinery producing  large quantities of Furnace Oil is generally a money loser or has squeezed margins based on the pure crude/product price differential.

The petrol consumption in the country is 7.6 million tonnes per volume out of which 30 per cent is being  catered from local refineries and the rest is imported to meet the ever-growing National Demand. Similaly, the Consumption of Diesel is around  7.3 million tonnes per annum. The local production can meet only 65 per cent of the total demand while rest is being imported.

At refineries side, five  refineries namely PARCO, National Refinery Limited (NRL), Pakistan Refinery Limited (PRL), Attock Oil Refinery (ARL) and Byco Petroleum Pakistan Limited (Byco) are operating in the country in areas of Multan,Rawalpindi, Hub (Balochistan) and Karachi. Byco leads with major share in installed capacity by 38 per cent followed by PARCO and NRL by 23 per cent, 15 per cent respectively whereas APL and PRL possess 13 per cent and 11 per cent share respectively in domestic installed capacity.

There are thirty Oil Marketing Companies in the country. Out of these are Pakistan State Oil Company Limited, Shell Pakistan Limited,  Total Parco Pakistan Limited, Attock Petroleum Limited, Gas and Oil Pakistan Private Limited and Hascol Storage Limited. Among these, Pakistan State Oil leads with an overall market share of 42.5 per cent  followed by Attock Petroleum with 10.9 per cent, Total Parco Pakistan  10.3 per cent, Hascol Storage  9.8 per cent  and Shell Pakistan 8.3 per cent.     

Oil Marketing Companies  receive, store, distribute/market  the petroleum products in the country by utilizing their supply arrangements and infrastructure facilities comprising of their installations, storage depots, oil pipelines and retail outlets etc.

The bulk of 19.68 million tonnes, around 74 per cent,   of petroleum products required by Pakistan’s market is transported by road, 24.4 per cent through oil pipelines and only 1.5 per cent by railways.

PSO, SPL and TPPL  hold equity partnerships in the White Oil Pipeline which provides  the strategic  infrastructure to transport  petroleum products from Karachi to the up-country locations. White Oil Pipeline has a transportation capacity of 12 million tonnes per annum.

 There are around 8567 retail outlets  of the oil marketing companies in the country. PSO has the largest  share of around 3487 retail outlets. Moreover, the oil market companies are also managing a fleet of more than 12000 tank lorries  for the movement and supply  of the petroleum products  throughout the country.