Pakistan Refinery Limited Registers Profit-After-Tax Of Rs348.6m In Sept 2017

[dropcap]E[/dropcap]xperts believe that Pakistan’s import bill will reach $50 billion during this fiscal 2017-18 which will chiefly disturb the Pakistan’s Balance of Payments (BoP) level. Pakistani oil industry experts presently revealed that Pakistan’s oil import bill grew about 35 percent YoY to $2.03 billion during July to August FY2018. Furthermore, the contribution of oil in total import bill was registered 21 percent, which is putting more pressure on Balance of Payments system during the period under review. The experts in Pakistan Bureau of Statistics (PBS) also mentioned that the import of petroleum products/commodities increased 19 percent in value. However, 58 percent growth was registered in terms of quantity of petroleum products. They also stated that import of petroleum crude registered a growth of 67 percent in value and 63 percent in terms of quantity during the period under review. In the petroleum group, the import bill of liquefied natural gas (LNG) surged 59 percent while that of liquefied petroleum gas (LPG) registered growth of 83 percent during the period.

Pakistan Refinery Limited (PRL) is a hydro skimming refinery planned to process various imported and local crude oil to meet the strategic and domestic fuel requirements of Pakistan. PRL has a capacity of processing about 50,000 barrels per day of crude oil into a variety of distilled petroleum products like furnace oil, jet fuels, kerosene oil, motor gasoline, high speed diesel and naphtha.

Since its inception, the management of PRL has been the principal manufacturer and supplier of petroleum products to the local market and Pakistan defense forces and even also takes pride in the edge it enjoys over its competitors in respect of efficiency, lower operating cost, high quality human resources, reliability and introduction of newer generation technologies.

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The official of the company calculated that during the period of 2017-18 (September 30, 2017), the Company registered a Profit-After-Tax (PAT) of Rs348.6 million as against to the same statistics of Rs122.2 million in the corresponding quarter previous year. This rise is chiefly attributable to stable gross refinery margins and stringent control over expenses. This number would have been even higher had the refinery not continued to suffer the adverse effect of pricing mechanism of High Speed Diesel (HSD) in accordance with the Import Parity Pricing Formula. This resulted in loss of Rs233 million in the quarter closed September 30, 2017.

The PRL’s financial adepts also mentioned in the financial statement of the company that since March 2013 to present the Company has been adversely affected by this Price Differential Claim (PDC) to the tune of Rs4,498 million. Owing to the refinery not meeting the time line of June 30, 2017 prescribed for the installation of Diesel Hydro Desulphurization (DHDS) Unit to produce EURO II compliant HSD, it is also exposed to downward revision of HSD pricing because of higher sulphur content and suffered a loss of Rs21 million during the period under review.