Pakistan : PSO Plans Increased Revenue ex Biodiesel & LPG

The company plans to open 200 retail outlets for LPG, a fuel used by cars and for heating at homes, by June, Managing Director Irfan K. Qureshi said in an interview in Islamabad. The company reported revenue of 719 billion rupees last fiscal year, driven by diesel and gasoline sales.

State Oil needs to diversify its earnings after reporting the first loss in 33 years, when it was formed. State Oil is investing in LPG and other fuels as Pakistan’s government tries to reduce its oil import bill, which accounts for about one fourth of overseas purchases.  “I am looking at diversification as a long-term strategy,” Qureshi said. “The company had gone into a slumber, it’s a sleeping giant and my game plan is to wake it up.”  Demand for fuels is set to rise as the economy rebounds from the slowest pace of growth in eight years. Finance Minister Shaukat Tarin expects the economy to grow 6 percent annually in five years, compared with 2 percent in the 12 months ended June 30.

State Oil has a 61 percent share in the country’s refined oil market and 81 percent in crude oil sales, according to its Web site.
The new product lines and inventory gains will help State Oil return to profit this fiscal year, Qureshi said in the interview Aug. 28. The company posted a loss of 6.69 billion rupees in the year ended June 30 as declining crude prices eroded the value of its inventory.

Pakistan State Oil sells diesel, fuel oil, jet fuel, lubricants and compressed natural gas through 3,612 outlets. Last week, the company avoided defaulting on payments for oil imports after it secured a 10 billion rupee loan from banks and the government gave it an additional 5 billion rupee cash-grant.

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