|Date: February 21, 2018|
| The Board of Management (BOM) of Pakistan State Oil Company Limited (PSOCL) has reviewed the performance of the Company for first half of the financial year 2017-18 (1HFY18) and is pleased to present its report thereon. |
During 1HFY18, the market share of White Oil stood at 45.7% while market share of Black Oil dropped to 73% from 73.4% over Same Period Last Year (SPLY) and PSO’s overall market share in liquid fuel market was 55% (1HFY17: 56%). The Company continued to deliver healthy volumes in all the businesses except Furnace Oil that declined due to shift of Power Plants to LNG starting November 2017. The shift is a positive game changer in the country energy mix.
PSO imported 69% of industry imports while local Refinery upliftment improved to 39% (9% increase over SPLY). The first tank lorry to comply with OGRA & NHA standards was introduced. PSO is also the first OMC in Pakistan to launch a complete solution for card and account management via online console "Fuelink". The Company was also honored by the Project Management Institute, USA with 1st runner-up award for the project "Cards end to end system development and migration".
The Company has approached the relevant authorities on the matter of ban on development of outlets, inconsistent exchange rate for pricing of imported POL products, fuel adulteration, last day volume sales capping, delay in settlement of IFEM receivables since 2009, dumping at PSO’s Retail outlets, increasing product volumes from across the border and reduced product supply committed in Product Review Meetings by other OMCs during expected price increase. While PSO is committed to run the business in a highly professional manner, these matters are of concern and are affecting ethical business practices and level playing field in the industry with now 22 OMCs. PSO is also facing challenges that are hindering its growth due to expectation that the Company will keep country’s energy supply chain running when other OMCs reduce product availability.
The outstanding receivables challenge (inclusive of LPS) as of December 31, 2017 stood at Rs 313 billion (June 30, 2016: Rs 277 billion) against supplies to IPPs, GENCOs, PIA and SNGPL resulting in surge in borrowings to Rs 119 billion. The Management is continuously pursuing with MoE/MoF for early realization of outstanding dues and injection of funds. PSO received Rs 88.9 billion vs Furnace Oil supplies of Rs 115.6 billion during 1HFY18.
The Gross Profit of the Company increased by 5% to Rs 18.7 billion during 1HFY18 vs SPLY (volumetric increase of 8% despite reduction in Furnace Oil volumes). The Government of Pakistan had issued PIBs of Rs 46 billion to PSO in June 2013 as part of partial circular debt settlement. Maturity of these PIBs in July 2017 is the key driver for lower interest income (Rs 2.1 billion) and Profit after Tax (PAT) of Rs 8.5 billion in 1HFY18 vs Rs 10 billion during SPLY.
PSO express its sincere gratitude to all stakeholders and shareholders for their contributions and support. PSO also takes this opportunity to thank the Government of Pakistan, especially Ministry of Energy, Petroleum Division for their advice and guidance.