A US-based chemical industry expert Syed S Hasnain, in his recent study conducted for Pakistan Chemical Manufacturers Association to assess needs of the chemical industry in Pakistan, has said that Pakistan needs to invest in oil refining sector to build a stronger economy. Over last 25-30 years Petroleum products and petrochemicals have played a vital role in building stronger and prosperous economies across the Globe. Countries like China, Japan, Germany and USA, have utilized the petro-chemical industry as the core building block of their economies. But Pakistan has completely neglected this sector, focusing on importing refined petroleum products.
The government has also been misguided by some elements, with vested interests in oil imports, who have suggested that that refining business has poor profitability, does not create large employments and hardly saves foreign exchange, so the country should continue importing high quality petroleum products including petrochemicals rather than manufacturing them locally.
Resultantly, no significant investment has been made in the refining sector. The country lacks any naphtha cracker for producing petrochemicals thus rely entirely on imports for meeting domestic demand. Pakistan’s import bill on petroleum products and petrochemicals runs into $12-14 billion annually as about 75 percent of the country’s demand is met through imports.
The Multi-Billion Dollar Saudi investment for establishment of an Oil refinery in Gawadar can be a game changer for Pakistani Economy if utilized properly. The Oil refinery can help to cut import bill and save millions for the national exchequer by enhancing exports.
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