KARACHI, November 09 2024: Attock Refinery Limited (ATRL) conducted a corporate briefing session on November 8th, 2024, to discuss the company’s FY24 financial results and its outlook for the future. Below are the key highlights from the session:
- Integrated Turnaround: ATRL completed a 30-day integrated turnaround of its refinery in 3QFY24, following a 5-year gap.
- Exports Performance: The company exported 80k tons of Low Sulfur Fuel Oil (LSFO) in FY24. For the current quarter, 30k tons are expected to be exported, and for FY25, exports are anticipated to reach 120k tons. The higher price for LSFO was attributed to its low sulfur content.
- New Refinery Policy: ATRL is prepared to sign the new refinery policy but is awaiting the resolution of an issue related to changes in the Sales Tax Act 1990 (under the Finance Act 2024), which may impact the company’s cost structure. The government is expected to address this issue within a week (by Nov 15, 2024).
- Deemed Duty Collection: Under the refinery policy, 10% and 2.5% deemed duties on Motor Spirit (MS) and High-Speed Diesel (HSD) respectively will be collected and placed in an escrow account. Refineries can withdraw up to 27% of project costs from this account.
- Refinery Upgrade Savings: The company expects annual savings of PKR 15 billion post-refinery upgrade due to the elimination of penalties on low RON quality and high sulfur content in HSD, as well as chemical and additive savings.
- MS Production Growth: Following the refinery upgrade, ATRL expects a 25% increase in Motor Spirit (MS) production.
- HSD Upliftment Challenges: The presence of smuggled Iranian HSD and unwarranted imports led to lower HSD upliftment. However, government intervention has successfully curtailed the inflow of smuggled Iranian products.
- Crude Oil Supply from Southern Region: The government has approved the allocation of 5,000 barrels per day (bopd) from the Southern region (Badin Basin in Sindh) to ATRL, considering the decline in crude oil supply from the Northern region.
- Badin Basin Supply: The process of starting the supply from the Badin Basin is in the final stages, with issues related to freight and transportation costs being resolved. The transportation costs will be reimbursed from the escrow account.
- Dividends on Old Reserves: The revised refinery policy has lifted the cap on dividends from old reserves, providing more flexibility for the company.
- Impact of Petroleum Price De-Regulation: In the event of de-regulation of petroleum prices, ATRL anticipates no Impact of Freight Equalization Margin (IFEM) due to the company’s strategic location.
These developments reflect ATRL’s ongoing efforts to enhance its operational efficiency, resolve industry challenges, and capitalize on the opportunities provided by the evolving refinery policy.
