The country’s refinery sector will welcome $10 billion worth investment “very soon”, Minister of State for Petroleum Musadik Malik said on Thursday.
Addressing a ceremony, he said Prime Minister Shehbaz Sharif would inaugurate a $10bn investment very soon, adding he was unable to share the details at the moment.
The state minister’s remarks come after the coalition government has approved a new refinery policy which aims to incentivise greenfield investment.
“We need a GDP growth of 5 per cent on a sustainable basis. To achieve this growth we require 7.5-10pc growth in the energy sector every year,” he maintained.
The minister said the government would sign a comprehensive energy security agreement, with countries including Central Asian states and Russia, adding the agreement would be presented to the public by the end of this year.
He further said the government also wants to utilize historic ties with the GCC (Gulf Cooperation Council) countries and reshape them into trade and commerce.
Malik said the government intends to open energy corridors with Central Asia, and another with the GCC countries. “Cheap energy would lead to industrial proliferation in the country. We want to establish small industrial areas in our rural regions for value addition,” the minister said.
Malik said there are many countries that cannot afford to have certain kinds of industries, because their factor input cost-labour cost has increased exponentially. “We would like to present Pakistan as a country that has the infrastructure, labour force and technology,” he said.
Malik told reporters that the government is intensifying its enforcement on border areas to curb oil smuggling from Iran, saying in the coming days the flow of smuggled oil will reduce.
The state minister said the purchase of crude from Russia is a “steel mill moment”, which would change the shape of Pakistan.
Minister of State for Petroleum Dr Musadik Malik said the first shipment of 100,000 tons of crude oil from Russia was poised to anchor at Oman Port by the month’s end, from where it would be gradually brought to Pakistani ports by small ships.
Speaking informally to the media, he explained that the oil shipment was anchored at Oman port just because of the logistic issues. Thus, he added that the decision to employ smaller ships for the onward journey was deemed the most practical and efficient solution.
Dr Musadik said the annual demand for petrol and diesel in Pakistan stood at 20 million tons, while local production only accounted for 10 to 11 million tons annually.
In contrast, he added, the consumption of furnace oil had significantly diminished over time.
Consequently, the minister emphasized the urgent requirement for a deep conversion refinery with a three to four million barrels capacity. Without such measures, projections indicate that by 2032, he added that the demand for petrol and diesel alone could reach 33 to 34 million tons, leaving a shortfall of approximately 22 million tons that would need to be imported.
The minister said the government was ready to collaborate with international investors in that regard because crude oil storage in the country was crucial to ensure energy security.
He said the government had introduced the greenfield refining policy of the petroleum sector as the country’s per capita energy consumption was the lowest in South Asia.
