Government to upgrades PRL to comply with IMO Regulation 2020

KARACHI: Pakistan Refinery Limited (PRL) has made much awaited announcement regarding its upgrade of plant to comply with International Maritime Organization regulations 2020 (IMO Regulation 2020).

Pakistan Refinery Industry was said to be at the brink of collapse because of the change in the demand structure of bunker fuels from January 1, 2020. The UN had set a deadline of January 1, 2020 for a reduction in the Sulphur content of the fuel oil used by ships.

PRL had remained silent over the question as to whether they were upgrading their plant which resulted into the nosediving of their share around 10/- per share.

The decision to implement a global Sulphur limit of 0.50 percent m/m in 2020 has a long way to go. PRL shareholders may get a lot of value out of it, as the revenues of PRL are expected to grow by leaps and bounds.

Inside Financial Market had written an Article back in December where it was acclaimed that PRL upgrade was on the cards.

The company is presently producing the Fuel Oil (FO) of new emission-standard enforced by the (IMO-2020) carrying much higher price than High Sulphur (FO) which was previously produced.

The refinery has also started producing the Euro-II compliant High Speed Diesel (HSD) from July 14, 2020. This has enabled company to save the price differential and High Sulphur penalty imposed on the non-compliant HSD.

The efforts are to improve future refinery-margins and to help the company in achieving regulatory compliance. However, based on the present unstable business situation and depending on the margins, the company will review its strategy regularly and if required any change it accordingly, company said in a notice to PSX on Thursday.

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