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Proposed crude oil export may incur $40m loss

ASHRAF KHAN

KARACHI: Pakistan may lose about $40 million on account of its proposed export plans of jet fuel and gasoline after mid-country refinery of Parco becomes operative by end this year.

Petroleum sector sources told Business Recorder that the government of Pakistan intended to export one million tonnes of gasoline and JP-1 to Singapore. Though, the exports are usually considered value-addition but in that case the government would only yield negative results, in view of monetary analysis of the prevailing petroleum price constituents, they said.

Accordingly one tonne of crude oil CIF Karachi would bear a cost of $128.45 (3 year average). Port charges come to about $4.86 in addition to pipeline freight from the port to mid country of $7.8 a tonne. The net per tonne cost of crude would be thus around $141.11, they said.

Then comes the refining cost and haulage back to Karachi, for reshipment of JP and gasoline to Singapore, they said. Per barrel refining cost of JP-1 is estimated at around $4.15 in addition to the refining losses (incurred due to furnace oil cost that is lower as compared with crude+standard production loss) of $40.89 per tonne.

Moreover, road tanker fare for haulage to Karachi would cost to about $26.71 per tonne. Port charges of $6.88 per tonne for white products, nay, ship freight of $8.0 would take up the net cost up to $223.59 per tonne. As against $223.59 per tonne, FOB Singapore price stands to around only $186.12, incurring a loss of $37.47 for each exported tonne, they said.

Pakistan has been currently slightly deficient in meeting its JP-1 demand. But with coming Parco's refinery in commercial operation, it would enjoy surplus balance of the product.