Nov. 27 (Bloomberg) -- Pakistan State Oil Co., the nation’s biggest fuel retailer, plans to build a $350 million storage facility in the south to secure supplies, according to its chief executive.
“It’s very scary that we have just one port that handles our oil shipments,” Naeem Yahya Mir said today in Islamabad. “God forbid if something bad happens, we are stuck.”
The planned project will increase the country’s storage capacity and reduce congestion at existing jetties, he said. Pakistan imports about 80 percent of its fuel needs. The terminal, which will be built in Hub town in Baluchistan province, will be a joint venture with a Middle Eastern company, Mir said, without disclosing the name.
Pakistan State Oil, or PSO as the Karachi-based company is known, also plans to build a 40,000 barrel-a-day refinery to produce diesel and gasoline in the north, Mir said. PSO is also negotiating to acquire a refinery in the country’s south, he said without giving further details.
The company’s foray into the refining business is part of Mir’s plan to turn PSO into a fully integrated fuel supplier from an oil-marketing retailer.
“The oil marketing business has become very saturated,” Mir said, who took over PSO early this year after a 29-year career at Kuwait Petroleum Corp. as a technical adviser.
PSO’s net income rose 68 percent to 4.2 billion rupees ($43.6 million), or 20.35 rupees a share for the first quarter ending Sept. 30, compared with 2.5 billion rupees, or 12.08 rupees a share, a year earlier, the company said in a stock exchange filing on Oct. 25.
Power stations and state-owned transport companies owe PSO 120 billion rupees, down from 240 billion rupees a few months ago, he said.
Utilities, besieged by unpaid bills and price controls, have delayed payments to fuel suppliers, which in turn owe oil refiners. The dues are known as circular debt in Pakistan.
PSO shares rose 3.6 percent to 225.50 at close in Karachi. The stock has gained 19 percent this year, compared with a 44 percent surge in the benchmark Karachi Stock Exchange 100 Index.