OMCs: Total Parco assures it will honour Chevron contracts

Chevron’s retail partners concerned about validity of lease agreements.

ISLAMABAD: Total Parco Pakistan Ltd (TPPL) has assured the government that it acquired Chevron Pakistan Limited’s (CPL) business as a result of a share sale deal and all agreements including those concerning the latter’s retail outlets will be honoured.

Sources said that CPL representative in a meeting held on October 14 said that TPPL had acquired the business as a result of share sale, and all the agreements will remain intact and honoured accordingly.

TPPL’s representative, while supporting CPL comments, said that the transaction had not been completed as yet. He said that both TPPL and CPL were still competitors and regulatory approvals were still awaited in order to complete the transaction. Hence, he said that commercial matters and future strategies could not be disclosed. However, he assured that upon completion of the transaction, CPL’s ownership agreement with TPPL would be honoured accordingly.

The meeting was convened keeping in view the fact that the Pakistan Petroleum Dealers Association (PPDA) had approached the Secretary Ministry of Petroleum, and shared their concerns with regards to various issues including honouring of their retail outlet lease agreements in case CPL retail outlets are sold to any other Oil Marketing Company (OMC).

Chairman PPDA stated that various media reports had indicated that CPL’s retail business had been sold to TPPL. The dealers were concerned over the future status of their lease agreements with CPL and how the new management was going to treat them.

He raised different questions including how the new management will handle situations where both CPL and TPPL retail outlets were adjacent to each other.

He said that licence fees should be kept the same in case of both CPL and TPPL retail outlets, and the CNG franchise fee should also be fixed. At present, TPPL’s fees are higher than CPL’s.

In case of lubricants, CPL’s sales throughput is higher as compared to TPPL and the income/revenue stream might get affected.

There are also differences in operations that might create complications. For example, CPL markets additised fuel (techron) which has a good market response whereas TPPL does not market additised fuel, which will affect streams.

The chairman said that dealers did not want to pursue these matters in court, and preferred to be taken in confidence by the management so that they retain the business.

Published in The Express Tribune, November 14^th, 2013.

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