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Tuesday , December 7 2021

Nothing wrong in importing finished petroleum products – Best option for oil-producing countries

Kamel Al-Harami
Importing all kinds of finished petroleum products is a normal practice and represents the best economical option for oil-producing countries. Most of the oil-producing countries, if not all, import particularly the Arabian Gulf countries. This is because one barrel of oil when refined does not fully meet the domestic requirements. It actually gives various products — about six major petroleum products of different percentage, depending on the type of crude oil and the refinery mode. This is necessary for meeting the maximum requirements of the country.

This is a direct response to the critics — that we in Kuwait are importing gasoline due to closure of Al-Shuaiba Refinery. All of our Gulf countries import petroleum products from Saudi Arabia, Iraq and Iran among others. Even though Saudi Arabia and Iran have over 15 local refineries, the needs are not being met due to increase in demand. No refinery can manage any country or company’s total balanced requirements.

Due to the closure of Shuaiba Refinery and since the other two refineries do not have sufficient capacity to meet the shortage, Kuwait has begun importing gasoline. This is necessary to meet our daily consumption of more than 120,000 barrels during the peak time during summer months, when most of the population is outside the country.

It is the best economical option as not a single refinery can produce enough to meet the complete needs of the country for petroleum products. It is a crime to keep Al-Shuaiba Refinery running just to produce gasoline for which Kuwait ends up with huge refinery losses for producing low quality products that makes selling crude oil in the open market a much better economical option by all means.

We will be importing gasoline for a while until we complete the gasoline units in Mina Abdullah and Ahmadi refineries by end of 2018.

In conclusion, import of petroleum products by oil producing countries is a normal practice with far better economic justification at all times. On the other hand, many oil producing countries build refineries for better economical returns in converting crude oil into finished products in order to ensure maximized selling of finished products instead of raw oil material. This is why we are encouraging investments and building refineries outside Kuwait for securing safe outlets for our oils in consuming countries such as Italy and Vietnam, instead of export refineries outside Kuwait.

email: naftikuwaiti@yahoo.com

By Kamel Al-Harami

Independent Oil Analyst

 

 

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