That the industry is on the verge of collapse has become a regular news as one industry after another is being affected by the liquidity crisis in the country. The oil industry too has announced it’s close to collapse state amid the liquidity crunch and currency devaluation. Pakistan Refinery Limited’s expansion project has also hit a roadblock due to a shortage of dollars and delayed payments as a result. PRL has been working on Refinery Expansion and Upgrade Project to produce Euro compliant petrol and diesel, and expand the crude processing capacity and upgrade from hydro skimming to deep conversion refinery.

The refinery recently announced its financial performance for the latest quarter (2QFY23), was also subdued by high cost of sales and high taxation besides higher finance cost. PRL’s revenues increased significantly in 2QFY23 primarily due to higher prices. The refinery’s gross margins however slipped from 4 percent in 2QFY22 to 1 percent in 2QFY23. The impact of higher cost seeped all the way down to bottomline where some support was lent to the earnings by a spike in other income. PRL’s earnings before tax were down by 58 percent year-on-year during the quarter, but higher taxation incidence turned net earnings negative.

For 1HFY23, the refinery’s topline growth also stood at more than double, while the gross margins fell due to cost pressure. However, unlike 1HFY22 where the company booked net loss, PRL reported positive earnings of Rs759 million. Higher other income also supported the bottomline, and despite a negative earnings for 2QFY23, 1HFY23 incurred profits. This was also due to better 1QFY23 earnings.