Refineries Demand An End to Smuggled Iranian Oil to Proceed With $6 Billion Upgrade Plan

Pakistan’s local refineries have demanded an end to the smuggling of petroleum products from Iran in order to proceed with the $5-6 billion upgrade plan in six years. The Oil Companies Advisory Council (OCAC) recently complained about the smuggled products in a letter to the Special Investment Facilitation Council (SIFC). It said in a letter that refineries will only go ahead with the investment plan when smuggled petroleum products are wiped out of the Pakistani market. OCAC lamented that oil marketing companies (OMCs) like PSO and Shell are experiencing reduced consumption and incurring monthly losses of $35.6 million, which is also hurting government tax revenue. This issue not only undermines the forthcoming investments in refinery expansions but also jeopardizes the objectives of the new refining policy, it added. The Refining Policy, finalized after four years, aims to attract significant investment and enhance production while meeting Euro-V specifications. However, the continuation of smuggling threatens to disrupt planned projects, impacting the entire supply chain and profitability of OMCs. OCAC complained that despite countless requests to the Petroleum Secretary, no concrete action has been taken against the rise in smuggled petroleum products. The association has called for immediate intervention to safeguard the energy security and economic stability of the country.