Refinery Pricing Models

ENAR has been involved in developing pricing policy framework and mechanism for petroleum refineries in Pakistan. ENAR, in the late eighties developed a computerized system for calculating border prices, crude costs and processing fee for coastal refineries. The system determined ex-refinery prices in relation to international prices. ENAR developed a Refinery Products Pricing Model (RPPM). The model was based on import parity pricing mechanism and has been developed with the objective of providing a comprehensive tool for assessing the impacts of changing prices on economics of respective refineries. The model was later revised under a World Bank financed project. The model has played a crucial role in determining the economics of existing as well as planned refineries. A similar model was also developed for Dhodak Refinery.