Karachi June 16 2022: Global recovery has been witnessed in the oil demand leading to higher volumetric sales coupled with higher pricing of petroleum products, leading to better GRMs and profitability margins for the local refinery sector.
However, uncertainty still prevails with respect to oil supplies as a result of Russia-Ukraine conflict which could further impact the pricing dynamics.
Pakistan Refinery Limited (PRL) margins, specifically impacted, due to non-installation of DHDS Unit needed to produce Euro-II compliant Diesel.
Despite that the Company’s sales have improved majorly on the back of increase in international oil prices and better volumes especially in petrol segments during the period ended March 31, 2022. Company has managed to report the net profit of PKR 5.415 million (9MFY21: PKR 0.6215 million) on account of effective utilzation of crude mix, prudent inventory management, in addition to the better GRM industry wide, despite the upward revision in policy rate and decline in Pak Rupee against US Dollar.
The local refinery sector is going through some significant challenges pertaining to up-gradation of the refining complex. The company along with other refineries has been in continuous discussion with the government to finalize a sustainable refinery policy that would address the upgradation concerns along with certain fiscal and tariff concessions to the refining sector. However, no final approval has been granted by the government which is expected to get delayed further amid current political instability in the country.
The working capital requirement of the Company have also increased considerably due to sharp increase in crude oil prices.
Pakistan Refinery Limited
PRL is a public company incorporated in Pakistan in 1960. The refinery is situated at Korangi. PRL, having refinery capacity of 2.1mln tons per annum, came fully online in Oct’62. PRL, a hydro-skimming refinery, is designed to process various imported and local crude oil to meet the strategic and domestic fuel requirements of the country.
