Attock Refinery shuts down main unit amid supply disruption

KARACHI: The suspension of oil tanker movement has disrupted the supply chain, forcing Attock Refinery Limited to shut down its main processing unit after crude oil supplies were halted, ARY News reported.

According to reports, Attock Refinery Limited confirmed that the disruption in crude supply left it with no choice but to suspend core operations. The situation has also affected the transportation of refined petroleum products, including petrol and diesel, which are currently not being dispatched.

The Attock Refinery Limited further revealed in a letter to the Pakistan Stock Exchange that stock levels of petrol and diesel have been rising due to the breakdown in distribution. The accumulation of inventory has significantly impacted operational efficiency.

Adding context to the broader oil sector, it is noteworthy that for years the government of Pakistan has been collecting “deemed duty” on petrol and diesel prices, channeling billions of rupees to local refineries.

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Speaking on the ARY News program Khabar, host Muhammad Malick explained that the deemed duty policy was introduced in 2000 for an initial period of three years to support refineries in upgrading their facilities and improving fuel production standards.

He further noted that by 2022, approximately Rs300 billion had been disbursed to refineries under this mechanism, with payments still ongoing. However, questions remain over whether these funds have been fully utilized for the intended upgrades.

According to the company, the plant will remain shut until the movement of oil tankers resumes and the supply and distribution of petroleum products return to normal. The situation raises concerns over potential fuel supply disruptions if logistical issues persist.