They were of the consensus that since local refineries have become obsolete and capable of producing a few products only, it would be prudent to shut these and import the finished products.
Almost all of them were annoyed by production of furnace oil containing high sulfur, especially because now the Government of Pakistan (GoP) has virtually stopped power generation at plants using furnace oil.
However, they had no clue what to do with the existing facilities, paying off banks, finding employment opportunities for those to be laid off and mobilizing foreign exchange for the import of finished products.
One of the youngsters who was bold and outspoken said, “Our mandate was to study the outlook and not to give suggestions regarding revival of these obsolete refineries”.
The other gentleman said, “Pakistan has to produce environment friendly products and if the local facilities are incapable of producing these products, the country must shutdown inefficient and pollution spreading refineries”.
One of the gentleman hit head of the nail by saying, “The real problem for the poor operating capacity and higher cost of production is production of ‘High Sulfur Furnace Oil’. As the storage tanks are full refineries have no option but to suspend refining activity”.
I presented to them my rationale, which I am sharing with policy planners, activists, to make the existing refineries eco-friendly. My submissions are:
The successive governments have failed in upgrading these refineries, but these are still producing, though fewer products, to meet the indigenous demand. Therefore, efforts should be made to operate these refineries at optimum capacity utilization and export surplus furnace oil. However, there is an urgent need to come up with a prudent “Refinery Policy” to facilitate creation of new refineries based of modern technology.
Along with this, incentives should be provided to ensure up gradation of the existing refineries.
There is no need to shutdown/scrap the existing facilities, which are capable of meeting the existing demand of the large percentage of the existing demand.
To put it on record the aggregate capacity of the exiting refineries, is estimated around 22 million tons, which is sufficient to meet almost 100% of the indigenous demand.
At the best, additional units have to be installed at the refineries to bring down the sulfur content in furnace oil for using it for power generation.
It is also to bring on record that almost all the power plants are have ‘dual fired’ boilers and these is no need to run these plants on gas, particularly on R-LNG.
I invite all by readers to please share their point of view.
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