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Information Technology


Company Profile


Company Profile


Company Profile



Company Profile

PSO: A cherished past, a promising future

Jan-07- 13, 2002

Petroleum products' marketing is a challenging business that, like other professions, requires foresight, acumen, quick judgment and hard work. At PSO, we have been breaking new grounds since our inception. By introducing an exciting product portfolio, meeting our corporate social responsibility, setting up storage depots at far-flung areas, presenting innovative marketing techniques, energizing industrial institutions, supporting the country's armed forces, ensuring customer satisfaction and meeting new business challenges, PSO has been setting the benchmark for other oil marketing companies during the 25 years of its existence.

In its present form, Pakistan State Oil (PSO) was formed on December 30th, 1976 through a reorganization plan implemented by the Government of Pakistan in pursuance of Section 15 of Marketing of Petroleum Products (Federal Control) Act 1974 and Section 8 of the Esso Undertakings (Vesting) Act 1976.

Under the plan, State Oil Company Limited a private company wholly owned by the federal government in which ESSO undertakings were vested on 15th September 1976 took over the entire undertakings of Pakistan National Oils Limited and Premier Oil Company Limited as disclosed in their respective balance sheets as at 30th June with all assets, liabilities etc, at the date of transfer.

The company was later converted into a public company and its name changed to Pakistan State Oil Company Limited.

The amalgamation scheme did not involve any acquisition of shares from private shareholders of Pakistan National Oils Limited and former Premier Oil Company Limited. PSO, with annual turnover of Rs 270 crores, thus, became the largest oil marketing company of Pakistan.

In consideration for the said transfer, the reorganization plan provided that all shareholders of the two former companies, PNOL and POCL, be issued fully paid-up ordinary shares of PSO against their holdings in PNOL and POCL along with fully paid-up premium shares. This was done at the rate of 1,185 PSO shares for every 1,000 shares of PNOL and 1,136 PSO shares for every 1,000 shares of POCL.

The formative period of any company is always comparatively difficult but for an organization emerging out of the merger of three separate units, the problems can be more complex. PSO, during its first year of operation, was no exception. However, most of the problems were satisfactorily resolved and the company emerged as a homogenous commercial organization.

PSO sold a total of 2,514,000 tons of petroleum products during the year ending June 30th 1977. This accounted for a turnover of Rs 404.53 crores, showing tax before profit of Rs 2.68 crores. Such meager return was partially due to the unrealistic gross margins, which were available to the oil marketing companies in all main products and were fixed by the government as far back as 1963.

At the end of the first year, the extent of the PSO operations was that it had four ocean terminals, 34 inland depots, four blending plants and 950 retail outlets. Of the retail outlets, 715 were gasoline and HSD stations, 126 service stations, 44 LDO farm stations and 65 kerosene stations.

In its first year of operations, the upcountry storage capacity of the company was augmented by 33,000 tons. The storage capacity was established at Gilgit, Chitral and Skardu, enabling the residents of the Northern Areas to obtain their requirements of petroleum products throughout the year and at reasonable prices.

By the second year of operations i.e. 1977, the company had successfully overcome the initial problems of the merger, establishing itself as a homogeneous commercial force capable of playing its rightful role in the economic progress of the country. It sold 1,826,000 metric tons of petroleum products during the year as against 1,746,000 tons in the first year. This indicated an increase of 4.56 per cent.

Since then, PSO's success story has continued with the company making a strong impact on the country's overall development over the years with excellent prospects for further growth.

A cursory look at "PSO at a Glance" in the annual report reveals remarkable financial strength accumulated since inception. Statistics, though somewhat restricted, nevertheless, give a picture of all-round improvement despite temporary setbacks.

The company's shareholders have reposed unwavering confidence in the astute financial policies followed by the company that have not only given extremely attractive cash dividends year-after-year but also a consistent increase in the shareholders' equity from Rs 116.2 million in 1977 to Rs 9,808 million in 2001.

And where do we stand today?

PSO's sales revenue during FY-2001 rose to Rs. 170 billion, showing a growth of 25.7% over the previous year. The company earned an all-time record gross profit of Rs. 6.4 billion, which was up by 12.4% over the preceding year. The profit after tax was Rs. 2.25 billion. This was marginally higher than the previous year's profit of Rs. 2.23 billion. This after-tax profit was achieved despite the financial impact of Rs. 408 million due to the Voluntary Separation Scheme (VSS) that the company offered in April 2001 as part of the restructuring plan. In addition, provisioning for medical retirement and other adjustments amounting to Rs 138 million had been made.

If PSO had not made these provisions, the company would have reflected an additional profit of the same amount, which would have resulted in significantly higher profit than the preceding year.

In every respect, the profit increase is primarily due to improved margins combined with the results derived from the New Vision Development program and other marketing initiatives.

Not only that, the company has emerged as one of the country's few largest taxpayers in the corporate sector. PSO's business operations have helped collect over the years Rs 338 billion in duties and taxes on behalf of the government.

Integral to our success are our efforts to provide our customers an unmatched service based on innovation, deep care and our vision for the future. Accordingly, we have launched an aggressive plan to build New Vision outlets in order to provide better quality service to its customers. Some 330 New Vision retail outlets have been established all over the country in a short period of two and a half years, which is a record.

At the same time, to set high standards of customer service, the number of Company-owned and Company-operated (CoCo) sites has increased to 20.

Yet another ambitious program that PSO has launched will see the promotion of Internet, especially in inaccessible areas of Pakistan. A total of 500 retail outlets are to be provided with Internet facility, which is now available at 150 outlets.