Refinery sales drop 6% in April

Industry profit margins jump 69 per cent.

KARACHI:

Refinery sales dropped by six per cent to 669,000 tons in April against the preceding month as they cut down on supplies to the leading marketing company Pakistan State Oil.

Among individual refineries, a sharp fall was witnessed in Byco Petroleum with sales plummeting 49 per cent on the back of a hefty drop of 65 per cent in furnace oil supply, according to an InvestCap research note.

Its contribution to the industry’s furnace oil supply also fell to three per cent in April against average seven per cent during the first 10 months of fiscal 2011.

In terms of individual products, gasoline, high-speed diesel and furnace oil contributed 37 per cent, 35 per cent and 30 per cent, respectively, to the decline during April.

Lower volumes to munch on better margins

The industry’s refining margins in April improved by 69 per cent to $2.9 per barrel, the note says. Margins for both Attock Refinery and National Refinery improved during the month to $4.2 per barrel and $2.6 per barrel, respectively. National Refinery turned towards higher margins which were realised due to higher high-speed diesel yield, while growth was restricted in Attock Refinery as its product yield declined during the month.

Byco was expected to have a much higher margin of $3.6 in April. However, lower volumes were going to offset the impact of higher margins.

Volumes are expected to improve in May as the government was able to retire Rs120 billion worth of debt in the first week of the month.



Published in The Express Tribune, May 14^th, 2011.