Oil refineries’ production drops 15%

Month-on-month output up 30 per cent in October, while production in first four months of current fiscal year drops.

KARACHI: Oil refinery production dropped 15.5 per cent in the first four months ended October of the current fiscal year compared with the previous year because of reduced output by Byco in July and closure of Pak-Arab Refinery Company plant for a month due to floods.

Total production by refineries stood at 2.4 million tons in the July-October period compared with the corresponding period the previous year.

Capacity utilisation was estimated at around 62 per cent, down nine percentage points year-on-year, InvestCap Research said in a report quoting data of the Oil Companies Advisory Committee (OCAC).

However, as the above factors faded away, capacity utilisation considerably improved to 70 per cent, translating into a 30.3 per cent surge in production to 664,000 tons in October compared with a month earlier. On a year-on-year basis, production was down 13.3 per cent in October.

Reliance on imports increases

The decline in production has led to increased reliance on imports. Despite of a 4.3 per cent year-on-year decline in petroleum product consumption in the four months, the country relied more on imports which increased from 59 per cent in July-October of financial year 2010 to 63 per cent in FY11, said Nauman Khan, an analyst at InvestCap Research.

The petroleum products whose imports went up included kerosene, mogas and furnace oil.

Shake-up in market shares

There was once again shake-up in market shares as Pak-Arab Refinery Company (Parco) recovered its lost ground and grabbed a 37 per cent share in October (28 per cent in four months), Khan said.

Another company with a noticeable change was Byco, which recovered and got an 8.9 per cent market share in October (4.6 per cent in four months). National Refinery stood with 23 per cent, followed by Attock Refinery and Pakistan Refinery with 21 per cent and 20 per cent, respectively.

Published in The Express Tribune, November 13^th, 2010.