Most progressive energy company
Khaleej Times recently interviewed Syed Mohammed Taha, Managing Director, Pakistan State Oil. Excerpts from the interview
Please tell us about Pakistan State Oil (PSO) and the remarkable profitability in the first six months of your financial year despite Covid-19?
The Covid-19 pandemic and ensuing lockdowns brought about unprecedented challenges and caused a massive global macroeconomic downturn. We faced severe financial and operational constraints due to the drastic drop in oil prices that resulted in heavy inventory losses and a steep increase in fuel demand nationwide. PSO fulfilled its national duty and ensured an uninterrupted supply of fuel throughout the country. Providing customers with critical services and ensuring the safety of all our stakeholders have been the company's top priority.
Our business continuity plan was mobilised with the onset of the pandemic along with the realignment of business strategies to ensure sustainability, agility and digital readiness. PSO bounced back faster than its counterparts in the industry due to our proactive approach. We increased our focus on high margin products while implementing an aggressive business strategy of market penetration to gain market share and maintain growth in all product lines. Reduced borrowing due to effective cash management and expenses control also contributed to the company's profitability. PSO continued to dominate the market during the first six months of financial year 2021 earning a net profit after tax of Rs9.5 billion, an increase of 48 per cent compared to the same period last year with Hi-Cetane Diesel and Motor Gasoline (MoGas) being major contributors.
What are your views on global energy prices?
Global energy prices are contingent on demand and supply i.e. higher supplies versus lower demand have a regressive impact on prices. With resumption in global economic activities and OPEC+ closely monitoring the market scenario, there are chances of a balanced global energy price under short to mid-term. Brent is expected to remain stable in the range of $60 to 65 per barrel.
PSO has successfully launched cleaner fuels. Please provide us with an update on this. Also, what is fuelink management system?
PSO is leading the sustainable energy revolution in Pakistan by becoming the first oil marketing company (OMC) to upgrade our country's fuel standard from Euro 2 to Euro 5, putting Pakistan on the map with a handful of Asian countries to adopt this international standard fuel. PSO launched its Euro-5 standard fuels starting with Hi-Octane 97 in Aug 2020 followed by Premier 92 RON and Hi-Cetane. Euro 5 standard fuels minimise the negative impact on our environment owing to the reduction in harmful vehicle emissions while also improving engine performance. The occupational health of industry workers who are involved in product handling is also enhanced. We commissioned our first electric vehicle charging unit - Electro in Islamabad in July 2020 and will soon expand the same across our retail network. We are also increasing our focus on alternate and renewable energy and will soon use solar energy to power our network of retail outlets, depots and filling facilities around the country.
Fuelink is a robust and first of its kind online dashboard that empowers our customers to manage their account and card related activities more efficiently, round-the-clock in real-time from anywhere. PSO is the first OMC in the country to offer a dashboard based advanced application for the convenience of its customers.
What CSR initiatives does PSO support?
'Caring and giving' is one of PSO's core values, making CSR an integral part of our core business strategy. With our presence across the country, we utilise our scale of operations to drive shared value amongst all stakeholders and positively impact people nationwide especially in the vicinities where PSO operates. We have a separate CSR Trust that is dedicated to supporting public charity projects in the areas of education, community development, healthcare and disaster relief. Despite incurring hefty losses of Rs6.5 billion in FY20, PSO's CSR contributions amounted to Rs180 million out of which approximately Rs85 million were donated for Covid-19 relief activities. During the current fiscal year, approximately Rs91 million have been spent on CSR projects mainly in the fields of healthcare and education.
Being the market leader is an important responsibility, please tell our readers about your investments in training and developing human capital in your sector?
As the nation's leading company, the market leader and the national flag bearer, it is our constant endeavour to energise future generations and provide them with the education and skills they need to transform Pakistan. We have undertaken numerous initiatives to encourage and inspire the human capital in our industry while fueling the professional growth of emerging talent. Recent programmes include the CA Trainee Program and PSO Mentorship Program wherein students and graduates are provided with the opportunity to gain practical experience through structured and hands-on learning under the guidance of industry experts at PSO.
PSO fosters the professional development of its people at all levels of the organisation. We have initiated learning programmes, workshops and certifications for our unskilled workers to develop their skillset and provide technical expertise in their area of work. A number of learning and development programmes are underway, which will focus on increasing job knowledge and providing diverse exposure to our human capital thus making them disruptors and change agents in the industry.
Any other point you wish to highlight?
PSO aims to enter all areas of the energy value chain and a number of projects are underway. To stay proactive in the fast-changing business landscape, we are also increasing our focus on alternate and renewable energy in line with the Government of Pakistan's (GOP) vision.
The world is witnessing a significant shift. With the increasing influx of disruptive technologies correlated with Industry 4.0, businesses are realigning business operations to ensure sustainability and operability. The pandemic has accentuated the importance of being agile and digitally ready in the fast-evolving business landscape. Being technology driven is no longer a choice, but a necessity. PSO has always taken the lead in embracing emerging technologies be it the adoption of SAP back in 2005, pioneering fuel cards or the implementation of e-procurement through SAP Ariba and terminal management solutions now. Our digital transformation journey has just begun. PSO is taking major strides towards operational sustainability and disruptive culture. More milestones to reduce human intervention and automate and digitise business operations will soon follow.
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