KARACHI: After establishing its name in the engine oil distribution segment, Hi-Tech Lubricants has kick-started the process of setting up an oil marketing company (OMC) to sell petrol and diesel through retail outlets.
“With reference to the OMC project of the company, the Oil and Gas Regulatory Authority (Ogra) has granted permission to proceed to apply/acquire no-objection certificates (NOCs) from concerned departments including the District Coordination Officer,” Hi-Tech Lubricants Company Secretary and Chief Compliance Officer Fraz Amjad Khawaja said in a notice sent to the Pakistan Stock Exchange (PSX) on Thursday.
Petrol price increases by Rs2.98, diesel's rate up Rs5.92 from February 1
The grant of NOCs would allow the company to set up “up to a maximum of 26 retail outlets in Punjab,” he said.
The start of retail sales through petrol pumps, however, would remain subject to “completion of necessary storage infrastructure, third-party inspector report confirming that storage/depot meets Ogra’s notified technical standards and Ogra’s approval,” he said. The company has kept advancing its projects, including in the engine and transfer oil segment, since January 2016 when it raised Rs1.8 billion through the sale of 29 million shares to high net worth individuals and retail investors at the PSX.
Hi-Tech’s share price rose 0.23%, or Rs0.21, to close at Rs91.71 with 529,000 shares changing hands at the bourse.
In the past, an official of the company had told The Express Tribune that it was planning to open 300 petrol pumps nationwide in a bid to become a medium-sized OMC by mid-2019.
In the first phase, the firm will set up fuel stations in Punjab. By the third year of the project, it will start setting up petrol pumps in Khyber-Pakhtunkhwa and then in Balochistan.
For this purpose, the company plans to invest up to Rs1 billion including a share float at the PSX. Furthermore, several pumps would run as its franchises, he said, adding the filling stations would offer all petroleum products except for furnace oil.
Industrialists unhappy with oil price hike
The company has already signed an agreement with Byco Petroleum for the supply of oil. Ogra binds OMCs to take supplies from domestic refineries. In case the refineries are short of supplies, the OMCs can import petroleum products.
The official said Hi-Tech Lubricants would also establish storage facilities in all the four provinces as it was mandatory for running an OMC in any province.
It operates a lubricant blending factory in Lahore and has recently expanded production with the help of equity float at the stock exchange.
Published in The Express Tribune, February 16th, 2018.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ