KARACHI – Pakistan’s refinery throughput dwindled 6.3 percent to 5.1 million tonnes in February 2011, primarily because of a month-long plant closure of PARCO and operational issues for BYCO and PRL triggered by circular debt. However, refinery production stood at 673,000 tonnes in the stated period – exhibiting a massive annual rise of 20 percent. In addition, capacity utilisation hit a 14 months high, standing at 76 percent – a reflection of rejuvenated refinery margins. Improved refinery margins are expected to bode well for the sector’s profitability, said Nauman Khan at Topline.
However, on the back of heightened regulatory risk (deemed duty) and exposure to rising circular debt, investors are advised to take exposure in ATRL and NRL as the two have a superior product mix and greater resistance to circular debt. Capacity utilisation of Attock Refinery Limited (ATRL) and National Refinery Limited (NRL), reaping benefits of rejuvenated refinery margins, stood at 90 percent and 86 percent respectively – the only two refineries posting a rise in their throughput in 8MFY11. Pakistan Refinery Limited (PRL) and BYCO Petroleum (BYCO) squeezed three percent and 37 percent respectively.
