Thousands of Tons of Petrochemicals Stuck at Karachi Port; Production Across Pakistan Disrupted

Industries across Pakistan are facing severe production disruptions due to thousands of tons of petrochemical containers being detained at Karachi Port. This has created a significant bottleneck in the supply chain. The situation has worsened as delays in the clearance of these shipments have escalated, with businesses incurring huge financial losses from demurrage and detention charges.

The detained petrochemical shipments, which include critical raw materials, have been stuck at Karachi Port for an extended period due to the government's directive from September 2023, halting the clearance of these vital imports. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) estimates that between 20,000 to 30,000 tons of petrochemicals remain stuck at the port, with industry representatives warning that these delays have tripled production costs, exacerbating the already challenging economic conditions in the country.

FPCCI has raised alarms over the critical issue, urging the government to take immediate action to release the detained raw materials and prevent further economic damage. FPCCI President Atif Ikram Sheikh blamed the crisis on amendments made to the Petroleum Act of 1934 in 2023, which he said had placed an undue burden on importers by imposing excessive charges and complicated procedures.

At a press conference held at Federation House on Saturday November 23, Sheikh highlighted the severe consequences of the delays, stressing that industries are facing mounting costs and operational shutdowns. "Importers and industries are incurring thousands of dollars in additional charges due to these delays," he said, underscoring the urgency of resolving the situation.

FPCCI Senior Vice President Saquib Fayyaz Magoon further warned that local industries, especially those relying on petrochemicals for manufacturing, are on the verge of collapse. "It takes up to two months to receive fresh materials, and industries are already on the brink of closure," Magoon said. He attributed the delays and complications to the misinterpretation of the Petroleum Act of 1934, which has caused unnecessary disruptions in the import process.

Magoon also emphasized the negative impact these delays have on industries' ability to fulfill orders, meet market demand, and maintain competitiveness. With production costs skyrocketing and raw material availability uncertain, many manufacturers are finding it increasingly difficult to sustain operations.

The FPCCI has called for urgent intervention from the government to release the detained consignments at Karachi Port. The business group also demanded the creation of a comprehensive petrochemical import policy, one that is developed in consultation with stakeholders to avoid such disruptions in the future.

The ongoing crisis is not just affecting local manufacturers, but it is also threatening Pakistan’s export sector. Industry leaders fear that if the situation continues, Pakistan could lose valuable export opportunities, which would further strain its economy.