Research Analyst
Aug 23 - 29, 2010

The principal activity of National Refinery Ltd (NRL) is to manufacture and supply fuel products, lubes, BTX asphalts and specialty products. It operates in two segments: 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.

In June 2003, the government of Pakistan decided to include NRL in its privatisation programme. The selling of 51 per cent equity and transfer of management control to a strategic investor had been proposed accordingly and the due diligence process for the privatisation was initiated. After competitive bidding, NRL was acquired by Attock Oil Group in July 2005.

The company has been privatised and the management handed over to the new owner (Attock Oil Group) on July 7, 2005.


The company's plants have a fuel refining capacity of 2,710,500 tones per annum (TPA) of crude oil, two lube refineries with a combined designed capacity of 176,200 TPA of lube base oils (LBO) and a BTX unit with a designed capacity of 25,000 TPA. NRL enjoys a competitive edge, as it is the only refinery producing LBO in Pakistan.

First lube refinery designed and constructed by SNAM PROGETTI of Italy with a capacity to process 539,700 TPA of crude oil and to produce 76,200 TPA of LBO was commissioned in June 1966. This refinery also produces fuels, asphalt and specialty oils.

Fuel refinery designed and constructed by Industrial Export Import (IEI) of Romania with a capacity to process 1,500,000 TPA of crude Oil was commissioned in April 1977. Its capacity was increased to 2,170,800 TPA in February 1990. The fuel products consist of LPG, Motor Gasoline, Kerosene, Jet Fuels, Diesel and Furnace oil.

Second lube refinery designed by CE Lummus of UK and constructed by Industrial Export Import (IEI) of Romania was commissioned in January 1985. It had a designed capacity of 100,000 TPA of LBO and 110,000 TPA of Asphalt.

BTX (Petrochemical) plant designed and constructed by Nordon et Cie of France with a capacity to produce 25,000 TPA of BTX was commissioned in April 1979. It was the country's first petrochemical unit. This plant produces Benzene, Toluene and Xylene for the specialty chemicals market. Toluene is also used in NRL's own Dewaxing units.

NRL's gross storage capacity, both at the refinery site in Korangi and at Keamari harbour comprises about 163,000 tones (20 days) for crude and 90,000 tones for petroleum products. The petroleum products are pumped from NRL storage tanks to oil marketing company (OMC) terminals or to Karachi airport by pipelines. Other products such as Lube Base Oils, Asphalt, and Chemicals (BTX) are transported through tank lorries.


YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Total Crude Processed in Pakistan 11,416,404 11,504,333 11,237,545 11,691,348 N.A
NRL's Share 24.02% 24.02% 24.93% 23.38% N.A


Despite the prevailing economic conditions, NRL earned a profit after tax of Rs1,967 million during the 3QFY10 as compared to Rs854 million during the corresponding period of last year. The profitability improved due to lesser loss after tax in fuel segment at Rs346 million as compared to a loss of Rs2,481 million for the corresponding period last year. Loss in fuel segment was mainly due to higher prices of crude oil as compared to selling prices of products, foreign exchange loss on crude oil payments and unfavorable pricing structure of HSD and MoGas.

Despite these factors, 3QFY10 recorded some improvement in profitability due to stability of PKR against US dollar.

Prices of both crude oil as well as petroleum products remained volatile during the period under review. The prices of Arabian light crude oil fluctuated between USD61.92 and USD81.94. On the other hand, prices of lube base oils remained relatively stable. However, the margins were reduced due to unsteady feed cost price and depressed global demand.

The company continued facing the liquidity crunch due to the huge receivables from OMC's mainly PSO. In this regard, PSO released Rs1.1 billion in September 2009. However, the same were settled with the liability of OGDC with no relief to the company. Thus, the matter of circular debts still largely remains unaddressed. Capacity utilisation declined to 77 per cent as compared to 91 per cent for the same period last year.


NRL is presently producing HSD of around one per cent sulfur content. In view of clean fuel quality requirements, NRL is planning up gradation of its facilities to enable production of HSD of 0.05 wt. per cent Sulfur content. Ultimate aim is to reduce sulfur further to 50 parts per million. UOP, an international process designer and licensor, is carrying out techno economic feasibility for conversion of redundant Kero Hydrobon unit to diesel service.

After project completion, NRL will be the first refinery in Pakistan to produce diesel of low sulfur up to 500 ppm and further to less than 50 ppm in accordance with the Euro IV Specification.