The economic shambles & amateur advisories – Oil sector on the verge of collapse

By our Research Team

It is easier said than done, a statement the world has heard in many a context, but for Pakistan, it is something the industrialist, small trader, or any businessman continuously hears in one reference or the other. Bleak economic figures and a constant change in the financial advisors show that the Government itself does not trust the mismanagement and haywire approach led by some people within the political circles of this country.

Yes, there are many issues such as increasing SPI numbers along with inflation and the ease of doing business for small traders getting more difficult, but what remains the biggest threat to this economy is, the major industrial sectors are being governed by people who have been known to have a bleak track record.

Focusing this piece on the oil & gas sector alone we have seen ridiculous assessments that have come forth by the so-called advisors with a dark track record in this industry saying that refineries should be shut and all imports should be done from countries such as India, UAE, and Saudi Arabia; their claim or local refineries being obsolete speaks volumes on the knowledge they carry in this particular field at least.

Then their emphasis on using RLNG instead of Furnace oil from the throughput of local refineries also led to these refineries incurring losses, so simply put, these so-called experts who are known to be a part of an international oil lobby themselves, harm the local industries and then claim that they’re not doing well, so let us start importing.

With the Rupee-Dollar parity and the import bill along with the Current Account deficit at its worst, how do such ideas swing into certain heads is a mystery.

The latest conundrum that is hovering around this particular sector is the latest news that has been coming out where certain refineries have written SOS letters to the Petroleum Division raising alarm bells that they are on the verge of closure.

Most refineries have ample stocks in their inventories lying around but what do these advisors do, they start importing instead of ignoring the local produce.

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The millions and billions invested in local refineries are at a threat of closure which would also enforce unemployment to millions of people tied to these refineries, distribution of products, and gas stations.

The question arises why import the same product that is lying for offtake in local refineries when there is no difference in the quality and with the given rise of the dollar, how does this help the economies case unless these so-called advisors have ulterior motives by importing from their clan of the international oil-lobby

 Other major refineries that are willingly expanding and bringing the all-important investment and up-gradations in the country are also on the verge of collapse. Recent articles showed that the biggest refinery in Pakistan, Byco is undergoing the same stress as they have the stocks but the advisors are content on importing from their ‘international lobby clans’ instead of uplifting stocks.

As per the news report Byco has locked in approximately USD 800-900 MN for bringing in 15 new state-of-the-art plants for newer products, but if the refineries of the country are kept ignored and the emphasis remains on imported products, then not only are you shutting down the national assets for good, but you are helping the dollar gain a much more elevated position in the currency market, hence devaluing your own currency.

If certain reports are correct, it is the same lot of advisors who not only destroyed and crumbled major oil and gas companies in Pakistan but have massive dollar accounts in 4-5 different countries.

It is astonishing that Institutions such as the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) are seen opening books on different discrepancies of companies, individuals including politicians, but when it comes to damaging the national assets on such a huge scale, their doors and eyes remain shut.

The imposition of billions as penalties on corporates and individuals has been witnessed and that is what one expects, but are they deliberately keeping their eyes away from this glooming issue is a question that needs answering.

Local refineries are on the verge of closure which would lead to millions of people being unemployed due to such rash decisions NAB & FIA follow up proceedings with discrepancies against everyone then why can such an issue where the national assets are being deliberately destroyed not being given importance

Pakistan’s own State oil company, PSO has also struck the SOS button and has sent letters repeatedly raising the same concern, but to no heed.

Their receivables have surpassed billions which is worrisome, but what does the government do, ignore it. Certain ministers running the ports and shipping department from the federal side are also involved hand in glove with these advisors and we all know the congestion at the ports and the extra demurrage charges companies such as PSO have to make due to poor decisions.

Our question to our Honorable Prime Minister and the Honorable Chief Justice is, if you are sincere to the country’s cause which we have zero doubt in, then why are such major industries being ignored and why is it that such a simple case is not visible where the local refineries and sector is being deliberately destroyed and in return piling more pressure on the currency, hence boosting the inflationary numbers.

For the Honorable PM, in his own terminology and jargon, you are continuously facing a waist-high no-ball repeatedly without the umpire making the right call, perhaps you should look into this with a microscopic vision.