Over-Importation of HSD Raises Concerns as Refineries Face Surplus

By Newztodays Team:
Concerns are mounting over the planned import of High-Speed Diesel (HSD) in the coming months, raising alarms about the potential strain on the country’s foreign exchange reserves and the well-being of local refineries.

According to recent figures, the country has planned to import substantial quantities of HSD despite the availability of significant local stocks. In July, 60,000 metric tons (MT) of HSD were imported, with an even larger 140,000 MT scheduled for August and a further 183,000 MT in September. These figures are raising eyebrows among industry insiders who point to the ample HSD stocks already present in the country. As of August 22, total HSD reserves stood at a substantial 725,000 MT.Refineries Achieve HSFO Export Target in Just 30 Days

The average daily sale of HSD in August is estimated to be 16,200 MT, while local refineries are producing approximately 14,300 MT daily. This means the country’s refineries are almost meeting the daily demand for HSD on their own. The decision to continue with high levels of imports, therefore, appears excessive and counterproductive, especially considering the surplus inventory.

Critics argue that this over-importation is resulting in the unnecessary depletion of precious foreign exchange (FOREX) reserves. With local refineries already flush with surplus inventories, the excessive importation of HSD could end up forcing them to reduce or even halt production, which would severely disrupt operations.

A spotlight has also been cast on the role of Oil Marketing Companies (OMCs) in this situation. It has been suggested that many OMCs are deliberately keeping their inventories lean to avoid potential inventory losses. This practice, however, is in direct violation of their licensing terms, which require them to maintain adequate stock levels to ensure the country’s energy security.

The over-importation of HSD at a time when local refineries have surplus stock not only threatens the stability of the refineries but also represents a significant waste of the nation’s financial resources. Industry leaders are now calling for a more balanced approach to HSD imports to avoid further economic strain and protect the long-term viability of local refineries.