March 12, 2020 (MLN): Pakistan Refinery Limited, in light of its new operational strategy, has undertaken certain non-CAPEX options, implementations of which is expected to have a positive impact on the Company.
As a part of the new operational strategy, the Company has considered new crude oil recipes which are expected to positively change the product slate and also make Refinery compliant with regulatory requirements. This change of crude oil recipe, coupled with other initiatives already undertaken, is expected to contribute as follows:
The Company is now producing Motor Gasoline (Petrol) of 92 RON thus saving the RON differential penalty. The Company is also producing MS 95/97 RON, generating additional revenue.
By the end of the current financial year, the Company is expected to produce EURO II standard High-Speed Diesel (HSD) thus becoming compliant with regulatory requirements and saving price differential and penalty, currently being paid on the non-compliant HSD. Price differential and the penalty paid in 2018-19 amounted to Rs. 1.15 billion.
Similarly, by the end of the current financial year, the company is expected to become the first Refinery in Pakistan to produce Very Low Sulphur or IMO-2020 standard Furnace Oil which being a premium product fetches a much higher price than High Sulphur Furnace Oil currently produced.
These initiatives will improve future refinery-margins and help the Company in achieving regulatory compliance. The above initiatives are in addition to the Refinery Upgrade Project and the short to medium term CAPEX projects announced earlier.
