Tuesday, February 27, 2024

PSO aims for 50% market share in fuel and diesel

In a recent interview, Pakistan State Oil (PSO) Managing Director Syed Taha stated that the business is aggressively attempting to redirect the focus of its sales efforts back to the retail segment.

Taha claimed that the company’s attention has previously strayed away from the retail sector, which he described as the “bread and butter” of the country’s largest corporate entity in terms of income.

A couple of years ago, our market share was at an all-time low. We had a 33 percent mogas (petrol) and a 36 percent diesel percentage. “We had lost our way,” he said.

According to data from the entire industry for the first eight months of 2021, PSO has a 43 percent market share in gasoline and a 47 percent market share in diesel. On an annual basis, it was able to increase its volumetric sales of gasoline and diesel by 23 percent and 19 percent, respectively, during the eight-month period. Combined, these two categories accounted for more than three-quarters of the company’s volumetric sales over the previous eight months.

Mr. Taha expressed confidence in his ability to increase the market share in these two categories to more than 50 percent in the near future. “We opened 70 petrol stations last year,” says the company. This year, we’re putting up another 70 tents. “Each station provides us with approximately 34-40 tonnes, with a 0.3-0.4 percent incremental impact on sales,” he explained.

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PSO had a market share of 58 percent in furnace oil from January to August, compared to a market share of 35 percent a year earlier. “Right now, we’re concentrating on attracting an increasing number of industrial consumers.” He explained that “last year, we won new business from big customers like as the Frontier Works Organization and the National Logistics Cell, which resulted in significant income.”

PSO reported an all-time record quarterly profit of Rs10.9 billion in April-June, bringing the company’s earnings for 2020-21 to Rs29.2 billion, compared to a loss of Rs6.4 billion a year earlier. In the case of Arif Habib Ltd., the improvement in annual profitability was attributed to a 24 percent increase in sales volumes, as well as an inventory gain of Rs13 billion, as opposed to an inventory loss of Rs20.5 billion the previous year.

The PSO’s managing director anticipates that the yearly demand for gasoline and diesel will climb 5-5.5 percent to 9 million tonnes apiece. According to him, the auto industry and growing trade with Afghanistan would be the primary drivers of growth in the volumetric sales of liquid fuels in the coming years.

Mr. Taha stated that he is “pre-emptively” establishing storage facilities in areas where “new pockets of consumption” are emerging. For example, the storage facility in Machikay with a capacity of 45,000 tonnes would “improve our response time,” he said, adding that the company is performing particularly well in urban areas. “We are having difficulties in some remote areas. We have a difficult time in Faisalabad because we don’t have any storage space. “Our response time is significantly faster.”

PSO is expanding its footprint in Balochistan, where it currently has 201 retail outlets, in addition to boosting the number of pumps in sections of Khyber Pakhtunkhwa and Gilgit-Baltistan to cater to the rapidly expanding tourism industry. At the end of the previous fiscal year, the corporation operated over 3,500 retail locations around the country.

“In addition to our unwritten commitment as a public-sector firm to serve the Balochistan market, we also have a significant commercial interest in the region.” Iran is in the midst of talks with the Western nations. The company would stop selling (petrol in Balochistan) at a discount as soon as it gains access to the worldwide market, according to the official. He also stated that the demand for petrol and diesel in Balochistan “nearly doubled” in the previous year.

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