Karachi –– Shell Pakistan Limited earned Rs 758 million profit after tax in quarter ended March 31, 2011 as against net profit of Rs 402 million recorded in same period last year.
At Board of Directors meeting on April 19, 2011 to consider accounts for quarter ended March 31, 2011, Shell Pakistan Ltd., Chairman said this improvement in profitability is mainly on the back of improved performance in business of the Company, reduction of operating cost and favourable movements in international price of oil during the quarter.
However, there continue to remain significant challenges for the Company due to low regulated margin and continued delay in recovery of Government refunds of indirect taxes and price differential Claims. Margin for petrol and diesel are one of the lowest in the region, having been continuously reduced by the Government over the recent periods at a time when oil price and all cost have been on the increase, he stated.
“In a high oil price and inflationary environment that is prevalent today, current level of margins for local sales does not provide appropriate returns to cover costs of operations and particularly high cost of investment in required stock and assets. This is not a sustainable situation for the Company and needs to urgently be addressed by the Government.”
He said in addition, Government receivables are now approaching in excess of Rs 6 billion and causing continuously high financing charge on the company. Since inception of these receivables over last few years, delays in settlement have already cost the company over Rs.3 billion in interest costs. “We are vigorously following up with concerned Government authorities for the early settlement of these.
“We strongly believe it is imperative for the Government to urgently address unfavourable impacts of reduction in oil marketing company’s margins and delays in settlement on Government receivables. We are hopeful Government will act quickly to create on environment conducive to business continuity and growth in this key sector of economy.”