Hi-Tech Lubricants to foray into fuel retail market in Pakistan
Pakistan’s Hi-Tech Lubricants is setting up an oil marketing company (OMC) to sell petrol and diesel fuel through retail outlets. Hi-Tech Lubricants operates a lubricant blending plant in Lahore.
Previously, the company announced plans to open 300 service stations nationwide in a bid to become a medium-sized OMC by mid-2019.
“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) last week.
Project start-up is subject to “completion of the necessary storage infrastructure, third-party inspector report confirming that storage/depot meets OGRA’s notified technical standards and OGRA’s approval,” he said.
In the first phase, the company plans to build service stations in Punjab. The company has received a license to set up to a maximum of 26 retail outlets in Punjab. By the third year of the project, it will expand to Khyber-Pakhtunkhwa and Balochistan.
The company said it plans to invest up to PKR 1 billion (USD 9 million) in Pakistan’s fuel retail market by floating shares in the PSX. In January 2016, Hi-Tech Lubricants raised PKR 1.8 billion (USD 16.2 million) through the sale of 29 million shares which was used to expand lubricant production capacity.
The company has already signed an agreement with Byco Petroleum for fuel supply. OGRA requires OMCs to source from domestic refineries. In case refineries are short of supplies, only then are OMCs allowed to import petroleum products.
Hi-Tech Lubricants would also establish storage facilities in all four provinces as it is mandatory for operating an OMC in any province.