After the [not cheap] Russian Crude oil has reached Pakistan, here we come with another update. According to the media reports, Pakistan Refinery Limited (PRL) is expected to present a report to the government in two weeks. The report will assess the quality, yields, and commercial feasibility of the heavier Russian crude oil, URAL, which the PRL is currently in the process of refining.
Report Will Assess…
The report will include information on the production percentages of petrol, diesel, FO, and light diesel oil, as well as the overall quality of the refined product. The key focus will be to determine the economic viability of the Russian crude oil after considering the refining costs and refinery margins. Moreover, This report will aid relevant government officials in deciding whether to pursue a government-to-government (GtG) import agreement with Russia.
The current production of motor spirit (petrol) and furnace oil in local refineries is as follows: petrol accounts for an average of 25-30%, while furnace oil comprises 45%. This production is achieved by utilizing crude oil sourced from Saudi Aramco and ADNOC.
However, according to an official, half of the 100,000 tonnes of Russian crude will be exported as furnace oil. This furnace oil will be priced at 75% of the cost of the crude, resulting in a 25% loss due to the heavier nature of URAL crude. The export will amount to 50% of the total furnace oil production.
Refineries in Pakistan, which primarily rely on crude oil from Saudi Aramco and ADNOC, are already experiencing a shortage of storage capacity for furnace oil. As a result, they export furnace oil with a 25% loss.
In Dubai, deep conversion refineries process the furnace oil exported by Pakistan refineries at a 25% loss. These refineries convert the furnace oil into finished products
Reports mentioned that PRL, an older refinery, is responsible for processing the Russian crude. Despite the heavy nature of the Russian crude and its discounted price, PRL will produce 50% furnace oil from it. This means that a shipment containing 50,000 tonnes of Russian crude will be exported as furnace oil, as its demand and utilization in Pakistan are not satisfactory.
