PSO chief eyes 50pc market share in petrol, diesel soon

PSO chief eyes 50pc market share in petrol, diesel soon

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Company profile:
PSO manages more than 60% of the total oil market stake in its customer portfolio, which includes concessionaires, government agencies, autonomous organizations, independent power generation projects, and other corporate clients. We deal with the import, storage, distribution, and marketing of various petroleum products such as gasoline, diesel, heating oil, kerosene, LPG, CNG, and petrochemicals.
Founded on December 30, 1976, after the Pakistani government took control of Pakistan’s National Petroleum (PNO), Dawood Petroleum Limited, and Esso Eastern and renamed it POCL (Premier Oil Company Limited) for trading in oil derivatives. PSO is the first publicly-traded company in Pakistan with sales of 1 trillion rupees. Pakistan State Oil has been a member of the renowned World Economic Forum since 2003.
Its main listing is on the Pakistan Stock Exchange.
Story:
Pakistan State Petroleum (PSO) was founded on January 1, 1974. The government took over National Oil (PNO) and Dawood Petroleum Limited (DPL) and merged them into Premiere Oil Company Limited (POCL).
Shortly thereafter, on June 3, 1974, the Petroleum Storage and Development Corporation (PSDC) was founded. On August 23, 1976, PSDC was renamed State Oil Company Limited (SOCL). Then, on September 15, 1976, the Esso business was taken over and control passed to SOCL. At the end of the year (December 30, 1976) Premier Oil Company Limited and State Oil Company Limited merged to replace Pakistan State Oil (PSO).
After PSO was founded, the corporate culture received a comprehensive update, which was fully implemented in 2004. This new corporate update breaks down the company’s core business into independent activities supported by legal, financial, information and other services. Through the inclusion of monitoring and control systems to improve and control this structural change, appropriate controls and balances have been put in place. The effective implementation of this corporate reform and the consistent application of best industry practices and business development strategies have enabled OSPs to maintain leadership in a highly competitive business environment. Pakistan State Petroleum distributes kerosene, light oil and lubricants to consumers through more than 500 distributors across Pakistan.
In a recent interview with Dawn, Taha said the company’s focus had previously shifted away from the retail business, which he referred to as “bread and butter,” the country’s top-selling company.
“Our market share was the smallest decline two years ago. We were 33% with mogas (petrol) and 36% with diesel. We weren’t in focus, ”he said. Rice field.
Based on industry-wide data for the first eight months of 2021, PSO has a market share of 43 percent in gasoline and 47 percent in diesel. Every year we were able to increase gasoline and diesel sales by 23% and 19% respectively for eight months. The two categories accounted for more than three-quarters of the company’s sales in the past eight months.
Taha said he was optimistic that the market share in these two categories would soon increase to over 50%. “Last year we installed 70 gas stations. This year we will be adding another 70. All stations will produce around 34-40 tons, with an additional 0.3-0.4 percent impact (impact on sales).” Called.
In heating oil, PSO had a market share of 58% from January to August, compared to 35% a year ago. “We are currently focusing on attracting more and more industrial customers. Last year we acquired new business from major accounts such as Frontier Works Organization and National Logistics Cell and made a huge profit. I increased it, ”he said.
PSO announced a record quarterly profit of Rs 10.9 billion from April to June, with sales of Rs 29.2 billion in 2020-21 compared to a loss of Rs 6.4 billion a year ago. According to Arif Habib Ltd. The increase in annual profitability is due to a 24% increase in sales volume and an increase in inventory of Rs.13 billion compared to an inventory loss of Rs.20.5 billion the previous year.
PSO MD expects the annual demand for gasoline and diesel to increase by 5 to 5.5% to 9 million tons each. He said the main driver of the growth in liquid fuel sales is the automotive sector, which will increase trade with Afghanistan.
Taha said he had set up “preventive” camps where there were “new sources of consumption”. For example, the 45,000-ton warehouse in Mashikai will “increase response times,” he said, adding that the company is particularly strong in urban areas. “We are fighting with certain parts of the country. We are fighting because Faisalabad has no storage. Response times are longer.”
In addition to increasing the number of pumps in parts of Khyber Pakhtunkhwa and Gilgit-Baltistan to cater to the rapidly developing tourism sector, PSO has a presence in Barotistan, which already operates 201 retail stores. At the end of last year we had around 3,500 branches nationwide.
“In addition to our written obligations as a public company to serve the Balochistan market, we also have a strong commercial interest there. Iran is negotiating with Western countries. Access to the international market. We will stop selling at reduced prices (gasoline in Balochistan) every time this happens, “he said, adding that gasoline and diesel demand in Balochistan nearly doubled over the past year.
Current debt:
He said PSO’s daily retail sales of Rs 3,000 crore fund the accumulated current debt in the gas sector. He made a headline on the banner about buying expensive LNG cargo now, but criticized the media for ignoring the cheaper ones.
Even large LNG buyers like China, Japan, and South Korea say they spot buying to meet 20-30% of demand, PSO MD said that long-term transactions and spot buying are closely related and insisted on an “optimal balance.” Reduce the market risk.
He said the chronic debt had shifted from heating oil to gas. “Sui Northern Gas Pipelines claims reached Rs.140 billion,” he said, and claims from Pakistan LNG Ltd, the only other LNG importer, are now approaching Rs.100 billion. “Our circular debt in the electricity sector should be around 200 billion rupees,” he said.
He said one way to deal with rising cyclical indebtedness in the gas sector is to adopt the Weighted Average Cost of Gas (WACOG) early on.
He recognized the state’s opposition to WACOG and said it should apply to the electricity sector, which has needs of at least 2 billion cubic feet per day. “It is doable. There is a federal agency,” he said. Closing the cost-price gap is the basis for stability in the energy sector.