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Global oil price changes not affecting refineries: Report

Tehran, Recent ups and downs in global crude prices won't affect refineries' profits, an Iranian energy expert says.

'In most times, by reducing the crude prices, the products prices fall, but not in a same proportion,' Reza Hosseini, a graduate from the Iranian Khajeh Nasir Toosi University and energy economics expert has written in a recent report, a copy of which obtained by the Islamic Republic News Agency (IRNA) on Sunday.

'This approach is valid for crude price rise. Hence, the refining margin can improve as well, and refinery owners will gain a high profit at the time of the initial fluctuations in oil prices,' Hosseini argues.

He believes that refineries haven't seen their revenues decline and on the contrary some of them have improved their margins.

Hosseini, who describes himself as a 'planning manager', has analyzed data about feed and products prices from 2010 to 2016.

'The internal rate of return (IRR) of refinery is equal to 19.7% and the refining margin is equal to 7.5 $ per barrel added by a 5% discount each refinery gets due to government subsidies.'

The university instructor also shows how refineries profited when global oil prices fell.

'When crude oil prices reduce by 1.9% from 6 - 7 December 2017, Naphtha prices reduce by only 1.0%, and that means earning a great margin and profit for refinery owners on this day,' he said.

Source: Islamic Republic News Agency

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