Earnings Estimates Face Sharp Reductions
earnings estimates drop 27 percent at Cnergyico and 5 percent at Pakistan Refinery. Attock Refinery faces a 23 percent reduction.
Gross Refining Margins Under Pressure
Gross refining margins will come under extra pressure. Officials may also lower the HSD crack-spread cap from $41.89 a barrel toward $30 to give households some relief.
Local diesel prices have already risen 54 percent since regional tensions flared, even with the existing cap in place, as per Taurus Securities.
Upgrade Projects Demand Fresh Borrowing
Most plants except Attock Refinery will need large new loans to fund Euro-V upgrades.
Cnergyico’s project is estimated at $1.2 billion. After incentive inflows a gap of about $681 million remains, much of it likely to be raised as domestic debt.
Pakistan Refinery’s $1.5 billion programme leaves a $915 million shortfall and the heaviest projected borrowing, exceeding Rs103 billion.
Attock Refinery can cover most of its $800 million cost from existing cash of Rs116 billion and is therefore less exposed.
Receivables Risk Adds Pressure At Pakistan Refinery
Pakistan Refinery already holds Rs19.6 billion in crude customs-duty receivables. The figure could reach Rs31-32 billion by the end of FY27.
National Refinery earlier wrote off Rs13.5 billion of similar claims. A comparable adjustment at Pakistan Refinery would cut margins sharply and could produce a loss if crack spreads also narrow.
Slower collections from the freight equalisation pool would worsen cash flow at a time when finance costs are rising.
Near-Term Outlook for Leveraged Refiners
The policy’s tighter fiscal rules, possible supply disruptions from the Strait of Hormuz, and higher leverage now cloud the near-term outlook for the two more indebted refiners.