ISLAMABAD: M/s Attock Refinery Limited (ARL) has warned the government that oil supply to Pakistan Air Force (PAF), Islamabad Airports and Oil Marketing Companies (OMCs) may be disrupted if its power plant, Attock Gen Limited is not operationalized immediately.

This warning was sent by Chief Executive Officer (CEO), ARL, Adil Khattak in a letter to Directorate General of Oil (Petroleum Division)

ARL, in the letter, stated that as a result of government efforts, Attock Gen Limited (AGL) became operational on November 23, 2022 which allowed it to operate refinery at 90 per cent of its capacity. However, AGL is again non-functional since December 5, 2022 due to a very high Economic Merit Order (EMO).

High FFO stock: ARL on verge of closure

In order to make AGL plant operational it substantially discounted/ reduced the RFO ex-refinery price to address merit order issue and it was at number 23 on the merit order on December 1, 2022 issued by the National Power Control Centre (NPCC). It is number one in RFO plants and is already higher than some of the RLNG units and coal plants.

ARL is confronted with serious challenge for disposing FFO as inventory level has now been reached at an alarming level of 37,000 tons with barely 8 days’ ullage, near to complete shutdown, which will surely disrupt crude oil/ gas supply-chain, as well as, affect product supplies in northern region including supplies to Pakistan Air Force, Islamabad Airports and OMCs.

Director General Oil, Abdul Jabbar Memon, in a letter to Power Division, has requested that in order to avert possible shutdown of ARL, Power Division should consider operationalizing AGL so that ARL refinery operates at optimum level and existing supply chain arrangements remain functional.

Copyright Business Recorder, 2022