Cabinet Committee on Energy (CCoE) headed by Chairman Ghulam Sarwar Khan, Federal Minister for Petroleum and Natural Resources has decided to Ban the import of Furnace Oil to encourage consumption of domestically produced oil. A Taskforce is being set up to address various concerns of local refineries. Babar Nadeem will chair the taskforce which will make recommendations on issues being faced by oil refineries in the next meeting of CCoE.
Currently, the domestic refineries have a stock of furnace oil in access of 200,000 tons which is not being used and furnace oil is being imported for use in the power sector. Representatives of local refineries had said earlier that if the present situation persists, they may shut down their business.
According to Oil Companies Advisory Council (OCAC), local refineries produced furnace oil of one million metric tons during the first four months (July-October 2018) and it was still being imported for consumption in power plants. Domestic refineries are daily producing 10,000 tons of furnace oil.
The government has decided to permit these refineries to export surplus furnace oil but according to experts the government has no policy or mechanism under which it allows export of surplus locally produced furnace oil. On April 14, 2018, Pakistan Muslim League-N government lifted the ban on import of furnace oil for power generation. The committee has further decided that merit order of power plants will not be disturbed so that consumer can be provided with economical electricity. A standard operating procedure (SOP) will be devised on criteria of demand of Power Division and supply (of RLNG) to Sui Northern Gas Pipelines Limited (SNGPL).