Rawalpindi: In a detailed report on its financial performance for the quarter ending September 30, 2024, National Refinery Limited (NRL) disclosed a significant downturn, posting a loss after tax of Rs. 7,237.00 million (PKR31.77 million), a stark contrast to the Rs. 3,203.00 million profit (PKR14.06 million) recorded in the same period last year.

The company, prominently listed on the Pakistan Stock Exchange (PSX), has been buffeted by declining oil prices and tight product margins, particularly in its fuel segment. This division alone accounted for a substantial loss after tax of Rs. 6,676.00 million (PKR29.29 million), a reversal from the Rs. 1,995.00 million profit (PKR8.76 million) previously achieved. The downturn was exacerbated by decreased demand and the inflow of lower-priced, inferior-quality fuels, prompting NRL to export 36,284 metric tons of Furnace Oil at below-market prices.

Amid these challenges, the lubricants segment of NRL also saw a downturn, with a loss after tax of Rs. 561.00 million (PKR2.46 million) compared to a profit of Rs. 1,208.00 million (PKR5.31 million) in the prior year. Despite an uptick in local sales of Lube Base Oils, the declining price trend dampened overall results.

Despite these setbacks, NRL has maintained its throughput at 48% and anticipates a positive shift in oil prices, which began trending upward post-quarter, to favorably impact future results. According to information available from the Pakistan Stock Exchange (PSX), the company's financial standing has been further strained by higher working capital requirements and increased financing costs, with mark-up costs rising to Rs. 2,568.00 million (PKR11.28 million) for the period.

The extended timeline for refineries to sign upgrade agreements under the revised 'Pakistan Oil Refining Policy for Upgrading Brownfield Refineries 2023' provides some respite. However, the removal of sales tax on key petroleum products, which affects the refineries' ability to reclaim a substantial portion of input sales tax, remains a significant concern.

NRL's leadership expressed gratitude for the ongoing support from shareholders, customers, and staff, and anticipates resolving pending government policy issues favorably.