(Trinidad Express) Petrotrin, the State-owned oil company, was not insulated from the impact of plummeting oil prices.
In fact, the company said it was reeling from implications of the rapid decline in crude and refinery margins had shrunk below normal commercial limits.
In a statement Wednesday evening, Petrotrin said: “Is it normal to expect that lower oil prices benefit the refinery since it lowers the cost of the oil we purchase for refining? This will be true if prices of refined products do not fall when the price of oil falls. This way, the difference between the sales price of the products and the cost of producing the products will result in a larger return to the company. The larger this return, the greater the profitability.”
The company stated that product prices had fallen, along with oil prices, making margins uneconomical.
“Petrotrin does not sell crude oil, only refined products. We rely on refinery margins to fund our operations. Petrotrin’s cost profile is not driven by oil prices. Manpower costs (salaries and wages, benefits, and allowances) represent 54.5 per cent of total recurrent cost. These costs are not driven by oil prices and therefore do not fall when there is a fall in oil prices,” the release indicated.
