KARACHI, Aug 30: Local refineries slowed down production of petrol this month after drastic changes in the pricing formula, availability of enough stocks and slightly lower consumption.

Sources in the Oil Companies Advisory Committee (OCAC) said that the National Refinery Limited (NRL) has reduced the production to 9,000-10,000 tons per month from 12,000-13,000 tons and the Pakistan Refinery Limited (PRL) has cut its monthly production to 7,500 tons from 10,000 tons. The Attock Refinery Limited (ARL) is reported to have slashed production to 21,000-22,000 tons from 27,000 tons, followed by Bosicor Refinery to 4,000 tons from 6,000-7000 tons.

Sources said that rains can also be blamed for a slight fall in the petrol consumption.

OCAC sources, however, ruled out any immediate impact on consumers after falling production of petrol since stocks are well above the consumption. Its impact may be felt in future, they added.

The local refineries have already cautioned the government that changes in the pricing formula for motor gasoline were not logical as it causes the price of petrol (produced by the four local refineries) to fall to around 93 per cent of Naphta price which is a basic raw material used for producing petrol.

The new pricing formula would not affect the Pak-Arab Refinery Limited (PARCO) as it is governed by a different formula.

PRL General Manager (Commercial and Corporate Affairs), Aftab Husain said his refinery had also curtailed the production, and added that the new pricing formula for petrol had some anomaly which needs to be rectified.

The change in formula, he added, would result in a negative impact on economic viability of refineries.

The local refineries, he said, have suggested to the government that instead of adopting any arbitrary method of determining import parity price of petrol, references should be made to the import of the last few imported cargoes. Even the World Bank formula is not being considered, he added. He said with the change in pricing formula, the four refineries would suffer an annual revenue loss of Rs5 billion.