Karachi August 29 2023: Shell Pakistan was granted an exemption for technical service fees and other expenses totaling PKR 10.69 billion pertaining to the credit notes issued by Shell International Petroleum Company Limited.
During the first half of 2023, the Company encountered significant external disruptions, including an unprecedented devaluation of the Rupee, rising inflation and prevailing macroeconomic uncertainty. These ongoing economic difficulties throughout the year resulted in a slow-down in economic activity, significant reduction in industry fuel demand and supply security risks. Suppressed demand was witnessed primarily due to elevated prices, coupled with political and economic unrest and the widespread availability of non-custom paid products.
However, the Company continued to focus on operational excellence to ensure strong cash delivery. The results also reflect the impact of one-off technical service fee relief received from Shell International Petroleum Company.
Company reported profit of PKR 3.5 billion for the first half 2023.
The Company’s financial results continue to be adversely impacted by the ongoing economic challenges, coupled with long overdue Government receivables of PKR 5,331 million. During the period, PKR has devalued by 27% against USD resulting in significant exchange loss for the Company. Although, the Company appreciates increase in industry margins by the Government last year, the recent PKR devaluation, coupled with historic high inflation during the period has more than offset this increase. The industry is deliberating with relevant Government authorities to reassess the industry margins to capture recent impacts.
