Oil imports affected by pier closure: OCAC3 min read

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ISLAMABAD: Fearing fuel supply shortages, the Ministry of Energy has directed Karachi Port Trust (KPT) and the Ministry of Maritime Affairs to complete repairs on port facilities at the earliest.

A couple of oil piers (OP) of KPT have remained non-operational for months causing serious logistical issues for the berthing of crude oil and finished products and affecting local oil refining, a senior official told Dawn on Tuesday. One of the piers has been closed for repairs since the last week of June, he added.

He said OP-1 was also currently operational even though it was an old facility.

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A spokesman for the KPT, Shariq Amin Farooqi, meanwhile denied the contents of the Petroleum Division’s communication. He said the OP-3 was a new pier and functioning very well and it was not closed. However, if a ship is already berthed and discharging the product it could not be asked to shift to another pier. Other vessels will have to wait.

In an urgent communication to the KPT, the Petroleum Division insisted that the issue of non-berthing of ships carrying petroleum products was creating potential risk of shortage.

Ministry and oil industry demand expedited reopening of pier 3, KPT says pier already open

It noted that the energy ministry also requested KPT repeatedly in July to expedite maintenance work of OP-3 at the earliest. KPT was also requested that until OP-3 was functional, OP-1 and 2 should be allocated to crude and petroleum products vessels.

Later on August 16, secretary Petroleum Division took up the matter with secretary Maritime Affairs to push for early resolution. However, so far no progress has been reported.

Also Read: Oil imports soar 34.3pc in July

According to the Petroleum Division, the Oil Companies Advisory Council (OCAC) reported that six vessels carrying petroleum products and crude oil were waiting off port for berthing or expected to arrive. “The delay in berthing is going to create supply issues for refineries in terms of crude imports and oil marketing companies (OMCs) for import of Mogas (petrol) and Jet,” the Petroleum Division said. It added that substantial increase had been witnessed in the demand of petroleum products throughout the country — especially for petrol — and a further surge in demand is also expected.

Moreover, crude oil stocks in refineries are not at comfortable level due to delayed berthing of vessels. Therefore, in order to avoid any potential disruption supply chain of petroleum products in the country, repair works at OP-1 and 2 should be completed at the earliest and urgent necessary arrangements must be made for berthing of vessels on priority basis, the Petroleum Division stressed.

An oil industry official said OP-3 had been closed for operations since June 29, 2018 due to damages caused by a berthing vessel and there was no information regarding its availability.

The OCAC had separately taken up the matter with the KPT and pleaded that priority should be given to POL vessels at both OP-1 and 2 as some refineries fear closure.

At a recent monthly product review meeting of the oil industry with the Petroleum Division and the oil regulator, the issue was however discussed and concerns were shared over the prolonged closure of port facilities as this could cause product availability issues during September. It was stressed that local crude supplies should be enhanced.

Almost 80 per cent of oil requirements are met through imports, both in the form of crude oil and refined products, particularly petrol and diesel — the two major products – having consumption of about 800,000 tonnes and 650,000 tonnes per month.

(This news/article originally appeared in DAWN on August 29th , 2018)

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