The refineries'' production in the country in November declined by 14 percent on year-on-year basis to 590,000 tons. Based on provisional numbers, the refineries'' production has declined by 5 percent on month-on-month basis. "We believe, further worsening of the circular debt situation is a primary reason behind the decline in the refineries'' production," Atif Zafar, an analyst at JS Global Capital said.
However, cumulative throughput in the five months of FY12 has increased by 4 percent on year-on-year basis owing to low base of last year. Looking at company-wise statistics, the production of ATRL and PRL marginally improved by 2 percent and 1 percent on year-on-year basis, respectively while NRL and Parco''s production declined by a respective 18 percent and 15 percent in November 2011.
Atif said that the decline in refineries'' production in November was largely led by lower production of Furnace Oil (FO) and High Speed Diesel (HSD) by 18 percent and 14 percent, respectively. The production of Motor Gasoline (Mogas) dipped by 4 percent. "We believe, further accumulation of circular debt due to the failure of the government to release money is a major cause for the decrease in production," he said.
Nevertheless, cumulative refinery production in the five months of FY12 increased by 4 percent on year-on-year basis to 3.2 million tons. "The improvement was largely witnessed in production of HSD (up 11 percent) due to low base of last year," Atif said. Recall that, last year''s floods led to temporarily closure of refineries. Mogas production has also jumped by 9 percent because of gas shortage in the country.
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