The country is likely to face a shortage of POL products as the import of essential chemicals, required by the refineries to process the crude oil, is in jeopardy due to the ongoing US dollar liquidity crisis.
“The LC (letter of credit) for the import of chemicals critical for refinery operations is not being opened and this situation may lead to reduction or suspension of the refineries’ operations, resulting in a shortage of POL products, particularly of Mogas (petrol),” industrial sources said.
“The central bank has informed us that no LC will be opened till December 6, 2022 — the date of payment of bonds worth $1 billion,” said one of the suppliers of chemicals.
It is also learnt that the oil marketing companies (OMCs) are facing the same situation owing to which the imported finished products and crude oil consignments are being delayed. However, the issue of essential chemicals is highly critical, as delay in their import will hurt most of refinery operations.
Meanwhile, a spokesman for the Petroleum Division and other senior officials did not come up with any justification for delaying the opening of LCs for import of essential chemicals. Currently, the country imports 87 percent of the finished POL products and crude oil. The existing refineries use various inputs to process crude to meet Pak specs, but the suppliers have been denied to open LCs critical to refinery operations, they said.
Some refineries have also written letters in support of chemical suppliers to ensure import of the essential chemicals, sources in the refinery sector confirmed.
Keeping in view the sensitivity of the issue, a chemical supplier wrote a letter on November 25 to Dr Asif Ali, Director, Exchange Policy, State Bank of Pakistan, seeking the opening of LC for the import of chemicals.
“Since the unavailability of these chemicals can affect the refineries’ operations, therefore, it is requested that the LC may be opened without any delay,” the letter said.