October 28, 2020: Byco Petroleum Pakistan Ltd. (BPPL), Pakistan’s largest oil refining company, today reported financial results for the three months ended 30 September 2020.
The company recorded a 23% decrease in gross sales to Rs 48.4 billion from Rs 62.9 billion in the same period last year, mainly due to a more than 30% decrease in oil prices in the international markets. Byco Petroleum reported a gross profit of Rs 1.7 billion, down 18% from Rs 2.08 billion last year.
Net profit fell to Rs 453 million, or Rs 0.09 per share, from Rs 870 million, or Rs 0.16 per share, a year earlier. The decrease in profits was partly due to the positive impact of the Pakistani Rupee’s appreciation on last year’s financial results.
The first quarter was a mixed period for Pakistan’s oil refining industry. The industry benefited from easing of lockdowns and lifting of travel restrictions, both at home and abroad, which helped stabilize international oil prices. As economic activity resumed, demand for petroleum products recovered in Pakistan. However adverse weather conditions, particularly the torrential rains, disrupted business operations. Margins on High-Speed Diesel (HSD) weakened but Premier Motor Gasoline (PMG) and Furnace Oil (FO) witnessed margin expansion.
The Government of Pakistan has revised the petroleum products pricing formula for PMG and HSD, from once a month to a bi-monthly format from 1 September 2020. Byco’s Chief Executive Officer, Mr. Amir Abbassciy said: “We praise the Government for the necessary reforms in the petroleum pricing formula.We stress the urgent need to completely deregulate Pakistan’spetroleum sector, including the abolition of the IFEM,to enable oil refineries to achieve sustainable operations and allow consumers to reap maximum benefits.”
The COVID-19 pandemic is resurging around the world, including in the US and Europe, which may adversely impact oil demand and commodity prices in the future. An effective COVID-19 vaccine being made available in the near term would improve the global business climate. Byco Petroleum has exhibited its resilience to stand firm during tough market conditions and is focused on generating strong returns throughout economic cycles.