Gh [45] 901-04 No, PL-NPA(4)/2000 Government of Pak Ministry of Pe eum and Natural Resources (Department of Petroleum and Energy Resources) Di orate General of Oil 1, Managing Director, National Refinery Limited, Karachi. 2, General Manager, Pakistan Refinery Limited, Karachi. 3. Managing Director, Attock Refinery Limited, P.O. Refinery, Morgah, Rawalpindi Subject:- RI Dear Sir, With a view to ensure t ¢ import parity prices (o the refineries, the pricing 5-1993 has by formula earlier communicated on 11+ amended. A copy of the revised formula effective Ist Ju 2000, giving comparison of the existing and the amended parameters, (four pages) duly signed, is enclosed herewith. 2 You are requested to submit your proposals for revision of the ex- refinery prices on the said basis, at an early date, for pro ing of the ease, 3 Pleas knowledge receipt Encl. As above. (GA. SABRI) DIRECTOR GENERAL (OIL). CC: Financial Advisor (P&NR), Finance Division, Government of Pakistan, Islamabad ... alongwith a copy of the form‘|fsJoae. ot "Page 1/4) a‘ COMPARISON OF EXISTING AND AMENDED PARAMETERS FOR REFINERY PRICING ON IMPORT PARITY BASIS EXISTING AMENDED Cost of Crude (Imported) FOB Freight: ol Actual contract prices paid by the refineries. Actual freight from individual ports as paid by the refineries. Marine Freight: Marine Insurance; At the rate of 0.045% of the C&E prices being the normal rate of private insurance ‘companies. Import Incidentals: No import/statutory incidentals will be allowed. However, the following identifiable Government charges and duties actually incurred by the refineries on the import of crude would be refunded directly by the Government to the refineries within 21 days of filing the claim 1) Import license fee. ii) Import surcharge. iii) Iqra Surcharge. iv) Flood Relief surcharge (if any). v) Wharfage. vi) Any other statutory duty if applicable, Cost of Crude (Local) Existing producer prices are already set on the principal of import parity i.e market price based on the arithmetic average of Dubai, Oman and Zakurn crude prices, marine freight from Ras Tanura to Karachi and adjustment for yield differential with the quality of Arabian Light. Following adjustments ‘would be made in the producer prices to arrive at the CIF price of the locel crude. i) Marine insurance at the rate of 0.045% of, CREF prices to be added. ii) Discount, if any, will be added, Exeise duty and inland freight, if any, paid by the refineries will be refunded in the same manner as import incidentals referred to under (A) above. No Change No Change No Change To be deleted No change except that the refineries will reimburse to Government the wharfage amount calculated for the quantity of local crude processed by the refineries, based on the actual wharfage rate on imported crude, as the wharfage on POL products is being allowed in the Import Parity Prices. Excise duty and inland freight, if any, paid by the refineries will be refunded directly by the Government to the refineries within 21 days of filing the claim, (Product Price FOB Prices: The average spot AG Mean prices for last 15 days as published in Platt’s Oilgram will be notifiéd by the Ministry of Petroleum and Natural Resources on the first and fifteenth day of each month, 7 “Import Parity Price: The import _ parity prices will be determined by adding the premium agreed with the Kuwait Petroleum Corporation (KPC) from time to time, to the FOB prices. Marine Insurance: At the rate of 0.045% of the C&F prices being the normal rate of private insurance Companies. Import Incidentals: No import/statutory incidentals will be allowed. However, identifiable Government charges and duties as applicable on import of furnace oil, would be levied on the furnace oil which is to be used as feedstock in the NRL lube refinery (Page 2/4) No Change except that the brealeup of the product make-up will continue to be as per item E of the existing mechanism with freight component to be added as clarified under the existing heading of Import Parity Price. No Change For White Products, 0.108% of C&F price and for black product 0.09% of C&EF price being the actual rates for imported POL products, The following incidentals being given on imported POL products may be allowed to the refineries for their product pricing: Hof C&F Prive a. L/C Commission : 0.15% bb, Bank Charges: 0.10% c, Handling charges: 0.15% d. Wharfage The actual rates for last fifteen days for the respective ports. For products imported at more than one port, the weighted avearge rate for the said ports will be taken. The current rates at different ports are: Keamari FO/HSD/SKO: Rs.29/ 1000 litres MS Rs.99 / 1000 litres EOTCO FO: $4,483 per ton HSD: Rs.29.50 per ton, The FOTCO charges for Fuel Oil will not be applicable to the Fuel Oil used as feed stock for NRL lube unit GE [fs] sid olD. Conversion Factor from Barrels to Mc All volumetric conversion to weight, especially for converting published product prices in US cents/galion to prices per metric ton, following conversion rates as given in Development Surcharge Rules 1967 would be used. Product ——Liitres/M.T. NAPHTHA — 1390.58 HOBC 1311.50 MS 1403.70 HSD 1203.02 KERO 1267.54 JP-I 1273.65 JP-4 1329.10 FFO 1047.45 DFO/LDO 1160.47 Solvent 1373.00 (As per ARL) MIT 1260.00 (As per ARL) Produet Make-up Given below is the product make-up to be used for determining prices of products which are not published in Platt’s Oilgram:- Naphtha HS.D Kerosene FFO JP-I JP-4 DFO/LDO Published Average AG Mean prices of last 15 days, Published Average AG Mean prices of last 15 days. Published Average AG Mean prices of last 15 days. Published Average AG Mean prices of last 15 days. Kerosene Spot Price Plus 1 Cent per US gallon. 50% Naphtha Plus 50% Kerosene. 80% HSD Plus 20% Furnace Oil CEES] 9010 0 (Page 3/4) No Change. As per Petroleum Products (Development Surcharge) Rules, 1967. The conversion factors revised on 30.06.1994 and being applied are as under: Product itresM.T, HOBC (337.80 MS 1415.10 “7? 7 Ie Hsp 1194.90, cle KERO 1268.40 JL JP-1 1285.20 i ¢ IP-4 1320.10 Ae FFO 1065.98 DFO/LDO. 1150.80 MTBE 1372.68 No Change No Change No Change No Change No Change except that differential, on sales tax paid on crude oil which was to be adjusted against JP-1 sales but is not being done as JP-1 is exempted from GST, will be reimbursable to the refineries. No Change No ChangeMS 87 RON: Naphtha Spot Price plus Caltex Bahrain Posted Price Differential of Naphtha aiid 87 RON based on the moving average posted prices for previous three years, subject to a maximum of $60 per ton. MS Naphtha Spot Price plus Caltex Bahrain Posted Price Differential of Naphtha and 83 Octane. HOBC Naphtha Spot Price Plus Caltex Bahrain Posted Price Differential of Naphtha and 98 Octane, ‘Naphta Spot Price plus 87 RON premium as calculated above and extrapolated to 97 RON based on unitary method. = MTT. 115% of price of Kerosene, No Change Solvent 110% of price of whole Naphtha. No Change LPG. Kerosene spot price Imported LPG price 2s determined by DG (Gas) from time to time in accordance with the following formula: Saudi Aramco’s LPG prices of Propane and Butane in the ratio 60:40 published in International Butane-Propane Newsletter/Middle East Economic Survey plus LPG import freight rate of $12.50 per ton. The freight rate to change as notified by DG Gas from time to time. BIX 130% of HOBC Deregulated F. Exch Actual Inter Bank Floating Actual exchange rate of Rupee to US § of the exchange rate of Rupee to US $ fifteen days period for which prices would be notified, is to be used for converting published international prices into local currency. Inder Capacity Premium For ARL a premium of $ 4.30 per ton will be allowed over import parity prices of the products defined in part above, The risk of enide oil evailahitiny wall he an ART *e arcsiiat of the fifteen days period for which prices would be notified, is to be used for converting published international prices into local currency. So™ — ‘o be deleted, = tatnisery of L x Sleds Director Genaral (Ot)