JS Securities Limited – JS Research

Karachi, August 19, 2019 (PPI-OT): Refineries: August’19 GRMs up 21% YoY

GRMs for August-2019, increased by 21% YoY to US$11.45/bbl, supported by robust performance at the top and bottom of the barrel.

However, sequential uptick of 23% MoM in GRMs is a result of strong middle of the barrel margins mainly HSD and Jet fuel.

We expect refinery margins to come under pressure in the short term, owing to anticipated low demand due to seasonal rain. Moreover, an overall increase in product output is to be expected and could further exacerbate the oversupply environment.

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