KARACHI: Pakistan Refinery Limited’s (PRL) shipment weighing 70,000 tonnes of crude oil was overdue due to delay in confirming its letter of credit, which could lead to temporary closure of the refinery, The News Friday.

According to oil industry sources, PRL sent a vessel to a Middle Eastern country to load 70,000 tonnes of crude oil after its letter of credit (LC) was opened by a local bank. However, the LC has not been confirmed by an international bank to clear the way for loading crude oil for shipment to PRL in Pakistan, they revealed.

The LC was supposed to be confirmed on Wednesday, but the bank delayed its confirmation. Finally, the confirmation was given on Friday, which delayed the departure of the oil shipment to Pakistan, sources said.

PRL needs 70,000 tonnes of crude oil to keep the refinery operational; however, the late confirmation of LC by the international bank would not allow the required crude oil to reach Pakistan by July 20, 2022.

After July 20, the refinery may have to temporarily halt operations until the crude oil shipment reaches its plant in Pakistan, sources have revealed.

“The 70,000 tons of cargo will probably reach July 22, 2022, according to reports, the cargo will depart from the Middle Eastern country for Pakistan on Saturday. It takes six days to reach the destination,” sources revealed.

“It looks like PRL would halt operations for two days until the necessary crude oil arrives at its plant,” sources said.

PRL management, contacted regarding the late confirmation of its LC for 70,000 tonnes of crude, confirmed what the source had shared about the delay from an international bank.

“Yes, the confirmation was made late for our shipment,” Zahid Mir, managing director (CEO) of PRL told The News.

He said the delay was due to technical issues; however, he avoided discussing in detail the specific reasons for the delay in the confirmation of the letter of credit by the international bank.

On a question regarding the temporary closure of the refinery, Mir said the company would not let this happen as it had sourced the necessary products from another refinery to keep its unit operational until the shipment arrived. 70,000 tons.

However, according to sources, the other refinery had not yet committed to delivering the crude oil needed for PRL to continue operating its refinery without interruption until July 22, when the 70,000 tonne shipment was due. come from the Middle East. Pakistan’s oil sector has faced difficulties in letter of credit confirmations from international banks for oil imports after the country’s perceived credit risk has increased in recent months.