The financial statistics released during quarter closed September 30, 2020 by the financial experts of National Refinery Limited (NRL) showed that during the period, the company incurred a loss after tax of Rs. 1,311 million resulting in loss per share of Rs. 16.40 as against to loss after tax of Rs. 679 million which resulted in loss per share of Rs. 8.49 in the same period. The period witnessed a careful approach towards the revival of economic activity all over the world with a fear of a second wave of pandemic-Covid-19 spread with the onset of winters. The condition severely affected refinery performance arising out of slim margins on Motor Gasoline and High Speed Diesel, while prices of Jet Fuels and Naphtha remained well below crude oil price. The throughput of Fuel segment remained 64 percent as against 62 percent in the corresponding period previous year. Under these challenging circumstances, the financial experts of the company also recorded that the fuel segment of the company incurred loss after tax of Rs. 1,150 million as against to loss after tax of Rs. 596 million in the corresponding period last year. Historically, NRL was incorporated on August 19, 1963 as a public limited company.
Government of Pakistan took over the management of NRL under the Economic Reforms Order, 1972 under the Ministry of Production, which was exercising control by its shareholding in State Petroleum Refining and Petrochemical Corporation (PERAC). Pakistan had decided to place the National Refinery Limited under the administrative control of Ministry of Petroleum & Natural Resources in November 1998. In June 2003 the government of Pakistan planned to include NRL in its privatisation programme. The selling of 51 percent equity and transfer of management control to a strategic investor had been proposed accordingly, the due diligence process for the privatisation was initiated. After competitive bidding NRL was acquired by Attock Group in July 2005. The Company has been privatised and the management control handed over to the new owner Attock Group on July 7, 2005. The Management recorded that NRL is engaged in the manufacturing, production and sale of large range of petroleum products. The refinery complex of the Company comprises of three refineries i.e. two lube refineries and one fuel refinery having a total crude oil refining capacity of 24,570,000 Bbl per annum which corresponds to 70,000 Bbls/day. Two Lube refineries process reduced crude to produce LBO, Bitumen, Wax and other specialty products.
During quarter closed September 30, 2020, the financial experts of NRL also computed that the government of Pakistan has altered the product pricing frequency from monthly to fortnightly basis and these are now linked with Import Parity Price of Arab Gulf Platts daily FOB average effective September 2020. They also calculated that Lube Segment incurred loss after tax of Rs. 161 million as against to loss after tax of Rs. 83 million during the same period previous year. The loss of lube segment is because of rise in feed cost and decline in prices of products. Slow-upliftment of Bitumen because of lower government spending on infrastructure projects is resulting in blocking of funds in inventory forcing the company to finance the operations by running finance.
During the period the management has successfully commissioned Two Stage Distillation Unit revamp of Lube-I refinery which improved the installed crude oil processing capacity of Lube-I refinery from 12,050 bpsd to 17,000 bpsd and vacuum fractionation capacity from 5,200 bpsd to 6,600 bpsd. Addition in capacity will enhance the production of prime grades by approximately 5,000 M.Tons per year. Consequently, the throughput of lube segment remained at 49 percent as compared to 65 percent in the same period previous year. NRL objectives and development strategy are aimed at attaining sustainable productivity and profitability and high standards of safety, occupational health and environmental care. This entails human resource re-engineering & development, enhancing value addition, implementing conservation measures and continuing growth through upgradation of existing also addition of new facilities. In the changing worldwide environment, corporate objective and development strategy have been defined to meet the challenges of 21st Century. The Management also maintains a port terminal installation placed at Keamari oils peers about 18 km from the Refinery premises. The Keamari Terminal is linked with the main Refinery through pipelines. Very large Crude Oil storage tanks at Keamari Terminal receive imported Crude from the oil tankers, which is then transferred to the Refinery by pipeline. Huge tankages are obtainable for export of Naphtha, which is also handled at Keamari Terminal. Furthermore, the fuel products from the Refinery are pumped via Keamari Terminal manifolds to Oil Marketing Companies, located adjoining Keamari Terminal.
Petroleum prices
The present government has reduced prices of Ms Petrol by Rs1.57/ litre and High Speed Diesel by Rs0.84/lite. It is important to note that the government of Pakistan is charging 17 percent General Sales Tax (GST) on all petroleum products. Apart from it, the government of Pakistan is also collecting Petroleum Levy (PL) on these products, which is directly taken from consumers. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) asked the government to slash the levies and taxes ratio on oil to support the industry and trade, as the government was charging record high petroleum levy and the GST on petroleum products in Pakistan.