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Government & Politics

The Bell about Oil & Gas

Karachi: ECC has approved the increase in dealer and OMC commissions on MS and HSD in a meeting held on 16th August 11.

According to Elixir Securities Limited, OMC margins for MS have been increased by PKR0.48/litre while HSD margins have been raised by PKR0.41/liter. Dealer margins have also been increased by PKR0.5/liter and PKR0.7/liter on MS and HSD, respectively. As per media reports, increase in the margins would be made if room for adjustment is provided by lower international oil prices, otherwise this would be implemented in phases.

In order to avoid recurrence of product shortage in the upcountry region, ECC has also approved bringing four depots of PSO under IFEM located in the Punjab region. Other OMCs will also include these new depots locations in their IFEM calculation when they will have storages at these sites. Reopening of four depots shall result in increase in number of depots to 16 from previously 12 and could increase IFEM.

SHEL the main beneficiary followed by PSO

SHEL shall be the major beneficiary of this upward revision in the margin as 38% of its core profits come from MS and HSD. High operating leverage further intensifies the bottom line impact. Cash trapped PSO shall also benefit from this revision as it handles nearly 54% total industry volumes of HSD and MS which comprise 34% of its core profits. APL would benefit the least amongst its peers as both products together comprise just 21% of its core profit + Commission income.

 

PSO EPS
PKR FY12 FY13 FY14 Jun-12 PT
Previous 54.88 56.41  60.98 397.00
Revised 67.45 70.02 76.20  480.00
PKR Δ 12.56 13.61 15.22 83.00
% 23% 24% 25% 21%

 

 

APL EPS
PKR  FY12 FY13 FY14 Jun-12 PT
Previous 62.50 74.40 86.98 450.00
Revised 66.50  79.00 92.55 550.00
Difference 4.00 4.60  5.57 100.00
%  6%  6%  6% 22%

 

 

SHEL EPS
PKR  CY11 CY12 CY13 Jun-12 PT
Previous  29.37 19.56 23.70 200.00
Revised 42.23 33.63 38.58 300.00
Difference  12.86 14.07 14.88 100.00
% 44% 72%  63%  50%
Source: Elixir Research

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