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Public debate before finalizing refining policy 2023

Public debate before finalizing refining policy 2023

Interview with Mohammad (Razi) Raziuddin — Chairman/CEO, Razi Energy Company (Pvt) Limited

PAGE: Please tell us something about yourself and your organization.

Mohammad Raziuddin: I have been involved with the Pakistan refineries since 1985. I have worked as policy maker, regulator, head of a refinery, advisory roles to refineries and consultant in Pakistan, Bangladesh, Saudi Arabia, USA and Ghana. I have worked on crisis and change management.

PAGE: What is your demand for new Refining Policy?

Mohammad Raziuddin: The new Refining Policy must have some objectives and targets to achieve. Under the present circumstances of Pakistan, where foreign exchange is at the lowest, debt crisis is at the highest and economy is in doldrums, any policy of extravaganza will be disastrous for Pakistan. It is time to be sensible and live within means.

PAGE: What are your suggested objectives?

Mohammad Raziuddin: In Pakistan, motorists and motorcyclists are not looking for speed and acceleration from 0 to 100 Km/hr in 10 seconds; unlike Americans and Europeans, instead power is more important. Therefore, Pakistan needs to opt to Euro II+ and RON 80 Petrol, Euro-II Diesel and Furnace Oil 380 Centistokes. A saving of US$1.5 billion annually is expected with much reduced pollution.

PAGE: How will you address sunset of petroleum products, dynamics of Pakistan’s fragile economy and scarcity of foreign exchange?

Mohammad Raziuddin: The new refining policy should address the sunset of petroleum products and dynamics of Pakistan fragile economy and scarcity of foreign exchange. There has been no public debate to have a national consensus. Neither CCOE nor ECC are the forums, the Policy should be put to approval in CCI; but to public debate first.

Worldwide new refineries orders, expansions, BMRs and upgrade are being cancelled (other than energy efficiency & product yields). Pakistan should not copy Scandinavian countries; it should look at its own dynamics.

PAGE: Which products should be produced in Pakistan?

Mohammad Raziuddin: It is counterproductive to produce Euro V and VI only because a few luxury cars need it. Pakistan needs to stick to Euro II. Pakistan’s Sulphur foot print is very little compared to rest of the world and countries in its league. Instead of wasting US$15 billion on new refineries with counterproductive incentives, it is better to spend the foreign exchange in more productive area.

The government should make public the new refining policy and backup studies and paperwork that shows benefits to Pakistan. A refining policy on whims and advice of importer is going to be suicidal.

PAGE: Why is it taking long to formulate new refining policy?

Mohammad Raziuddin: In the absence full time Federal Minister every matter is delayed. Such an important ministry of the economy, where timely decisions are needed is without a Federal Minister, is it not amazing?

Frequent changes of federal secretaries, additional secretaries in Petroleum Division have caused delay in the Refining Policy. Every officer needs to understand that policy before signing it off. These are also some examples of poor governance.

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