Hi-Tech Lubricants to open 300 petrol pumps in 3 years

First pump to be operational by December 2016 in Lahore

KARACHI: After having established a foothold in the engine oil distribution market, Hi-Tech Lubricants is now gearing up to open 300 petrol pumps nationwide, said its company secretary Muhammad Imran on Tuesday.

“We have resolved to establish a medium size Oil Marketing Company (OMC) with 300 petrol pumps in the next three years,” he said after the board of directors approved to amend the Memorandum of Association for the purpose.



“We are targeting 1% market share at the outset. Later on, sky is the limit,” he said.

“We have learnt that a leading and huge OMC is winding up operations in Pakistan. If that happens, there will be a big room available for mushrooming growth for us,” he added.

“The first of the series of petrol pumps would come online by December 2016 or early in 2017 in Lahore,” Imran informed, adding that the pump would offer all petroleum products except furnace oil.

He said the company would make a minimum investment of Rs500 million which could stretch up to Rs1 billion. “We would utilise Rs842 million available as working capital with the firm. The available fund is part of the equity recently raised at the Pakistan Stock Exchange through Initial Public Offering.”

Out of 300 pumps in the making, the firm itself would operate four to five as flagship fuel stations while the remaining would be run by dealers as franchise.



He said the increased profit margin of 2.41% on petrol was lucrative and healthy to establish footprint in the OMC sector. “The availability of infrastructure and logistics for the distribution of engine oil nationwide strengthened our idea to open up the OMC,” said Imran. “We were already in the process of opening engine oil retail outlets across the country.”

“We have signed an agreement with Byco Petroleum for the supply of the oils,” he added.

The Oil and Gas Regulatory Authority (Ogra) binds OMCs to take supplies from local refineries. In case, refineries are short of supplies, oil marketing companies are allowed to import petroleum products. Imran said in the first phase, the firm would set up fuel stations in Punjab. “By the third year of this project, we would be setting up petrol pumps in Khyber Pakhtunkhwa and then in Balochistan.”

He said the firm would also establish storage facilities in all the four provinces, as it was mandatory for running an OMC in any of the provinces.

Subsidiary company in Afghanistan

The board of directors of the firm also approved to incorporate a wholly owned foreign subsidiary company in Afghanistan, which would supply vehicles’ engines oil to the neighbouring land-locked country.

“Afghanistan is a ‘30,000-ton engine oil market’, Caltex and Total have a strong foothold in the segment there,” he said.

Hi-Tech Lubricants currently holds 5.5% of the engine oil market share in Pakistan and expects a similar market share in Afghanistan.



The company is expected to start its oil supply to Afghan market from July or around.

Hi-Tech Lubricants operates a lubricant blending factory in Lahore and has recently expanded production with the help of raised equity at the stock exchange.

It imports its lubricants from South Korea.

Published in The Express Tribune, May 11^th, 2016.

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