The yearly profit of New Zealand Refining Company went down 81% in the year to December 2009.

While last year it was running in profit at $124.9 million, this year it was $23.6 million after tax.

The ordinary revenue was also down 37% to $250.5 million from last year’s $397.8 million.

Chairman David Jackson said that this outcome was someway expected in view of the unstable market scenario during the latter part of the year.

Where the company’s refining margin was about $12 a barrel in the starting of the year, it had declined to around $1 a barrel by year end.

“Major oil companies including BP, Shell, Chevron and ExxonMobil have announced a large dip in profits”, he said.

Mr. Jackson informed that increased marginal pressure has lead to sale, closure or reduced capacity at refineries across the globe, notably in the UK, France, Spain, Japan and the US where the largest refiner Valero, closed its
185,000 barrels a day Delaware City plant, last November.

NZRC decided not to pay a dividend this year owing to the drop in profits and demand on its capital.

"We have seen a slight improvement in margins from late December through January 2010, however, the supply/demand fundamentals have not changed sufficiently to expect a sustained recovery in refinery margins at this stage," Mr. Jackson said.