ISLAMABAD: The country may plunge into the worst imaginable energy crisis as virtually all refineries are teetering on the verge of financial default and may close down operations by Jan 15.Source (h/t Rajiv in this iTulip thread). Of course, claims of this sort can't necessarily be taken at face value, but this seems considerably more credible than some other stories of this nature; Pakistan is dependent on imported fossil fuels for much of its electricity supply, and its government may not have the resources to bail out those refineries. If I was them, I'd be dropping subtle hints with the Americans about the effect on the war effort in Afghanistan in the event that Pakistan falls into crisis. I have a feeling that Uncle Sam would quietly cough up the necessary cash if it came to that.
All the oil refineries of the country, currently working on a negative gross revenue margin, and with their borrowing limits already exhausted, are likely to shut down within the next two weeks following their expected default to retire the existing L/Cs to import crude oil. The shutdown would mean no oil supplies for thermal power generation plants and the picture turns outright dark.
This harrowing scenario of the looming crisis was given to The News by a senior functionary of the Ministry of Petroleum and Natural Resources, speaking on condition of anonymity.
Wednesday, January 6, 2010
Oil shortage looms in Pakistan
It's been reported that most of their refineries are on the verge of bankruptcy: