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The country’s oil refineries will get additional revenue in third quarter of current finance year due to hike in crude oil price in international market.
According to the statistical data, the global crude oil prices (Arab light) stable around $110 per barrel an average of 3pc gain petroleum prices in third quarter of 2013 is likely to bode well for domestic sector. As per data domestic gross refinery margins (GRMs) which are preliminary gauge of sector’s profitability are like to stand around $3.5 a barrel in the preceding quarter.
Statistical data further revealed that during the current quarter international crude oil prices on an average increase by 1pc to average at $111 per barrel as compared to last quarter. On the other hand product prices on an average rose in rang of 3-5pc rendering into better product margins in 3rd quarter of current fiscal year.
It is stated that Petrol (MS) spread to improve by significant $4 per barrel to $ 5 per barrel in 3Q 2013 while margins on High Speed Diesel (HSD) are also likely to $2 to $24 per barrel. Furnace oil margins are expected to remain stagnant near negative $27 per barrel. The other product like kerosene oil estimated to be up by $3 to $ 15.
Subsequently, refineries gross refinery margins to show a considerable improvement in 3Q13 as compared to 2Q13 and in 3rd quarter of current fiscal year GRMs are likely to remain around $ 3.5 against margins in last quarter.
It is estimated that Attock oil refinery (ATRL) 3Q margin would remain around $5.5 barrel which much higher than estimate that was$3.5 per barrel in 2Q13.on the other hand NRL’s fuel refinery margins are likely to operate on break even levels which are higher than estimated US$ 1 per barrel in the preceding quarter. However lube margins which are major contributor to company’s earning continue to go to sluggish period.
With outgoing quarter 3Q13 depicting improved GRMs we expect sector to showcase better core-refinery earning as against 2Q FY13.