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Oil refineries seek bailout package for survival

Oil refineries seek bailout package for survival

ISLAMABAD: Oil refineries across Pakistan have conveyed to the government in plain words that they are left with no option but to shut down their operations because of the adverse impact of COVID-19 on the oil industry across the world, according to media reports on Friday.

The spread of the novel coronavirus in recent weeks and a price war between Gulf nations and Russia on crude has sent oil prices into the negative zone.

As a result, refineries in Pakistan have braved severe price fluctuations, more so in recent months, resulting in huge losses.

The refineries have told the government that if it wants to keep the industry afloat, then it must come up with a bailout package for refineries, as out of five, three refineries have already braved over Rs16 billion in losses in the last nine months.

The two other refineries in Pakistan are also running huge losses that they plan to make public in the days to come. The losses will soar when financial data of refineries from April onward starts rolling in, the publication claimed.

The Managing Directors (MDs) of five refineries that include National Refinery Limited (NRL), Attock Refinery Limited (ARL), Pak-Arab Refinery (PARCO), Attock Refinery Limited (ARL), and BYCO, in a meeting held on Thursday, told the government that they were close to shutting down.

The meeting, attended by Special Assistant to PM on Petroleum Nadeem Babar in the chair, was informed in plain words that the refineries were going to close down and their survival was not possible unless and until the government came up with a bailout package.

Government asks refineries to come up with proposal for ‘inevitable’ bailout

A senior official who was also part of meeting told The News that the meeting participants were told by refineries’ top management that the price of petrol had come to equal half of crude, and the diesel price was now equal to previous prices of crude, with more losses expected in May.

The government side, headed by Nadeem Babar, the official said, asked the refineries to come up with proposals for bailout package on their own which is inevitable for their survival, and bring them to the government for brainstorming and fine-tuning after input from the petroleum division and finance ministry.