ISLAMABAD: Policy bottlenecks and continued reliance on imported petroleum products are placing avoidable strain on local refining capacity, with Attock Refinery Limited (ARL) emerging as a key example of how regulatory decisions are driving up costs for consumers and undermining energy security. Despite having available capacity, ARL is currently operating at just 65–70 percent due to a combination of reduced crude supply from northern oilfields and weak upliftment of its finished products. According to ARL Chief Executive Officer Adil Khattak, excessive imports approved by the regulator have displaced locally refined diesel, while oil marketing companies (OMCs) increasingly opt to manage inventories through imported supplies—sometimes even within ARL’s natural supply zone. Khattak said the Oil and Gas Regulatory Authority (OGRA) continues to permit imports and allows transportation costs to be reimbursed from the Inland Freight Equalization Margin (IFEM) pool, even when ARL’s products are readily available. This practice, he argued, contradicts Petroleum Rules that require priority upliftment from domestic refineries. At the same time, delays in allocating condensate crude oil from southern fields have further constrained ARL’s operations. For more than three years, the refinery has sought approval to receive 5,000 barrels per day of southern condensate—currently being exported due to lack of domestic buyers—but the request remains pending with the Petroleum Division. Industry calculations indicate that transporting finished petroleum products costs nearly twice as much as moving crude oil. As a result, the continued export of southern condensate and import of finished products has imposed unnecessary costs on consumers and led to avoidable foreign exchange outflows, while also limiting supplies available to OMCs and the armed forces. ARL has informed the Pakistan Stock Exchange that persistently low crude stocks and reduced upliftment of motor gasoline and high-speed diesel during December 2025 have led to rising inventories at the refinery. Consequently, the company will temporarily shut down its main crude distillation unit (HBU-I), with a capacity of 32,400 barrels per stream day, for three to four days starting January 4, 2026, to carry out essential maintenance. Copyright Business Recorder, 2026