Petrol price freeze costs refiners PKR49/litre

A new petrol-pricing mechanism will require Pakistan’s refineries to surrender Rs49.02 per litre of motor spirit sold to oil marketing companies, according to Mettis Global. The October 31 notification keeps the pump price at Rs377.91 per litre, while shifting the cost of higher import premiums and customs duty away from consumers and onto refiners.

Intermarket Securities estimates that the change could push petrol gross refining margins from about US$4.8 per barrel to minus US$23 per barrel. It puts the combined monthly pre-tax impact on four listed refiners at around Rs12.4 billion, with Attock Refinery and National Refinery facing estimated monthly earnings reductions of Rs24.2 and Rs23.1 per share, respectively.

Pakistan Refinery and Cnergyico are each estimated to face a monthly impact of about Rs2.7 billion, while high-speed diesel is unaffected. The mechanism is reviewed every two weeks, and the brokerage says it will await the next notification and discussions with the government before updating its estimates.