Research Analyst

Oct 27 - Nov 02, 2008

National Refinery Ltd's (NRL) principal activity is to manufacture and supply fuel products, lubes, BTX asphalts and specialty products. National Refinery operates in two segments i.e. Fuel and Lube. The Fuel segment is a diverse supplier of fuel products and offers gasoline, diesel oils, kerosene and furnace oil. The Lube segment provides different types of lube based oils, asphalt and wax free oil for different sectors of the economy. NRL objectives and development strategy are aimed at achieving sustainable productivity and profitability and high standards of safety, occupational health and environment care. This entails human resources reengineering and development, enhancing value addition, implementing conservation measures and continuing growth through upgradation of existing as well as addition of new facilities.

(Rs in million)

FY 2002-03


FY 2003-04






FY 2006-07




Source: NRL


National Refinery's ratings reflect the company's sustained monopolist position in the lube segment and its higher operational flexibility, which largely insulates the company from the cyclical nature of the refining industry. Meanwhile, the ratings are supported by the company's very strong risk absorption capacity emanating from a debt-free capital structure, strong cash flows and robust liquidity. Additionally, the company enjoys synergic benefits as part of an integrated group in the petroleum sector. Pakistan Credit Rating Agency (PACRA) has maintained the long-term and the short-term ratings of NRL at 'AAA' and 'A1+'.



GROWTH IN FY08 ( Rs in 000)

Net Sales


Cost of products sold


Gross Profit


Source: NRL

NRL financial results shows the key business structure, operations and Net sales. During FY2008, the Net sales is increased by 42 percent and cost of products sold increased by 40%. The company's Gross profit is increased by 71 percent over one year. Due to increase in Net sale the profit for the period was Rs 6,005 mn during FY 2008 which has increased as compared to the last year.


GROWTH IN FY08 ( Rs in 000)

Current Ratio


Quick Test


Fixed Assets Turnover


Total Assets Turnover


Return on Assets


Return on Equity


Earning Per Share (Rs)


Source: NRL

Currently, the Current ratio of National Refinery is recorded 1.15 due to increase in current assets during FY2008. The current ratio shows the good performance of the company. In order to increase the current ratio, NRL is in position to pay off its liabilities in the future. The Quick acid is recorded 1.05 in financial year 2008 because of increase in stock in trade. The Fixed assets turnover 4.52 and Total assets turnover 2.77 are recorded in this year due to increase in Net sale by 42 percent. The company showed an increase in Return on assets (ROA) by 12.9 percent, Return on Equity (ROE) 34.47 percent and increase in Earning Per Share (EPS) 43 percent due to increase in gross profit and profit before tax of the national refinery during FY2008.


NRL maintains a port terminal installation located at Keamari oils peers about 18 km from the Refinery premises. The Keamari Terminal is connected with the main Refinery through pipelines. Very large Crude Oil storage tanks at Keamari Terminal receive imported Crude from the oil tankers, which is then transferred to the Refinery through pipeline. Huge tankages are available for export of Naphtha, which is also handled at Keamari Terminal. NRL's two Lube Refineries were installed, the starting point of first Lube Refinery is a Crude Distillation Unit and subsequent Vacuum Distillation Unit, whereas the Second Lube Refinery directly starts with a Vacuum Distillation as it takes feedstock from Fuel Refinery's Crude Distillation Unit. Its primary purpose is to separate the desalted crude oils into its fuel components, Gases, LPG, Naphtha, Kerosene, High Speed Diesel and Furnace Oil for down-stream processing.

LPG from the Crude Distillation Unit is sweetened at Merox units and thus deodorized in the presence of catalyst and sent to storage for consumer off-take. As far as the BTX plant is concerned it is based on Reformate as feedstock from the Fuel Refinery, the unit is designed to extract the aromatics by SHELL Sulfolane extraction process. National Refinery owns the only BTX plant of the country, meeting the demands of Paints, Pesticides and explosive manufacturing industries. National Refinery also utilizes a large Number of utilities to support the manufacturing at production units. The supply of water, steam, fuel and air is the assignment of Utilities Department. A comprehensive utilities complex exists to meet the refinery's requirements of utilities, steam, condensate, cooling water, instrument/plant air and fuels. This all operate round the clock for smooth operation of the entire Refinery.


In Pakistan people are facing extreme difficulty because of high prices of fuel particularly for those who are using motorcycles and heavy vehicles. Our government must decrease the fuel prices as international oil prices have down significantly in the last one month. Increase in oil and fuel prices is a major problem in Pakistan as life becomes difficult for a common person. As far as NRL is concerned, no doubt, it is a highly reputed for the quality of its products. NRL has grown and developed with in the country and today enjoys an special position of being a major factor in oil products market in pakistan.