1.

History of Pakistan StaTe Oil

THE CREATION OF PAKISTAN STATE OIL (PSO) CAN BE TRACED BACK TO THE
YEAR 1974, WHEN ON JANUARY 1ST; THE GOVERNMENT TOOK OVER AND MERGED PAKISTAN
NATIONAL OIL (PNO) AND DAWOOD PETROLEUM LIMITED (DPL) AS PREMIERE OIL COMPANY
LIMITED (POCL).

SOON AFTER THAT, ON 3RD JUNE 1974, P ETROLEUM STORAGE DEVELOPMENT CORPORATION
(PSDC) CAME INTO EXISTENCE. PSDC WAS THEN RENAMED AS STATE OIL COMPANY LIMITED
(SOCL) ON AUGUST 23RD 1976. FOLLOWING THAT, THE ESSO UNDERTAKINGS WERE
PURCHASED ON 15 TH SEPTEMBER 1976 AND CONTROL WAS VESTED IN SOCL. THE END OF
THAT YEAR (30 TH DECEMBER 1976) SAW THE MERGER OF THE P REMIER OIL C OMPANY
LIMITED AND STATE OIL COMPANY LIMITED, GIVING WAY TO PAKISTAN STATE OIL (PSO).

AFTER PSO’S INCEPTION, THE CORPORATE CULTURE UNDERWENT A COMPREHENSIVE RENEWAL

PROGRAM WHICH WAS FULLY IMPLEMENTED IN 2004. THIS PROGRAM OVER THE YEARS
INCLUDED THE REVAMPING OF THE ORGANIZATIONAL ARCHITECTURE , RATIONALIZATION OF
STAFF , EMPLOYEE EMPOWERMENT AND TRANSPARENCY IN DECISION MAKING THROUGH CROSS
FUNCTIONAL TEAMS. T HIS NEW CORPORATE RENEWAL PROGRAM HAS DIVIDED THE COMPANY ’S
MAJOR OPERATIONS INTO INDEPENDENT ACTIVITIES SUPPORTED BY LEGAL , FINANCIAL ,
INFORMATIVE AND OTHER SERVICES . INORDER TO REINFORCE AND MONITOR THIS STRUCTURAL
CHANGE, RELATED CHECK AND BALANCES HAVE BEEN ESTABLISHED BY INCORPORATING
MONITORING AND CONTROL SYSTEMS.
HUMAN RESOURCE DEVELOPMENT BECAME ONE OF THE MAIN PRIORITIES ON THE COMPANY’S
AGENDA UNDER THIS CORPORATE REFORM .

IT IS DUE TO THIS EFFECTIVE IMPLEMENTATION OF CORPORATE REFORM AND CONSISTENT

APPLICATION OF THE BEST INDUSTRIAL PRACTICES AND BUSINESS DEVELOPMENT STRATEGIES ,
THAT PSO HAS BEEN ABLE TO MAINTAIN ITS MARKET LEADERSHIP IN A HIGHLY COMPETITIVE
BUSINESS ENVIRONMENT .
   

   
JANUARY 1, 1974

THE FEDERAL GOVERNMENT TOOK OVER THE MANAGEMENT OF PNO (P AKISTAN NATIONAL O IL) AND DPL
(DAWOOD PETROLEUM LIMITED), RENAMED INTO POCL (PREMIER O IL COMPANY LIMITED) UNDER
MARKETING OF PETROLEUM PRODUCTS (F EDERAL C ONTROL ACT , 1974)

   

   
June 6, 1974

The government incorporates “Petroleum Storage Development Corporation’ PSDC

   

   
August 23, 1976

PSCDC renamed to State Oil Company Limited (SOCL)

   

   
September 15, 1976

The Governement purchases ESSO undertakings, vests their control in SOCL

   

   
December 30, 1976

The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it
Pakistan State Oil Company Limited (PSO)
   

   
 1999

The new vision program is launche

Product & services

PSO caters to POL requirements of a wide spectrum of customers comprising the retail consumer,
various industrial units, government, power projects, aviation and marine sectors of Pakistan. We are
truly the drivers of economy of this country.

A network of 3612 retail outlets enables us to reach Pakistanis from Nagarparkar to Sost. We are
proud to cater to the fuel and non fuel needs of approximately 2.8 million customers per day. 

PSO industrial consumer dominance in the government sector can be judged by the fact that all the
major government entities like OGDC, Pakistan Army, Pakistan railways, Navy, NLC, PAF Wah and HIT
have entrusted PSO to meet their POL needs.

Besides supplying fuel to national power utilities like WAPDA and KESC, PSO is the sole furnace oil
supplier to all Independent Power Projects (IPPs) in Pakistan with a share of over 80% in furnace oil
market. Moreover, PSO is also playing its due role in meeting the growing energy demand of the
country.

PSO also supplies fuel to industrial units like textile, cement, agriculture, transport etc. Our industrial
consumer base includes prestigious entities like the Presidency and the Prime Minister Secretariat,
where PSO has developed consumer outlets for timely refueling of their fleets. 

Furthermore, PSO also serves the fuel needs of both national & international air carriers. We also
provide jet fuel into-plane refueling facilities at 9 airports of Pakistan i.e. Karachi, Lahore, Islamabad,
Peshawar, Multan, Faisalabad, Turbat, Pasni and Sialkot.

We also supply fuel to ships at Karachi Port, Korangi Fish Harbour & Port Qasim. Moreover, we cater
to the fuel requirements of Pakistan Navy, Maritime Security Agency, Karachi Port Trust, PNSC, Faisal
Marine Oil Services (Pvt) Ltd.

Swot analysis
Strength,……….
 PSO Has Sustained Its Growth in eArning
 It has the largest Retail outlet network in Pakistan.
 Modern Lubricant Manufacturing Plant.
 Strong Vertical integration.
 Pso has Long term Contract wit public & Private sector
organization For Te supply of fuel.
Weakness,………..
 Large number of outstanding from clients .
 Weak mangemnt system.
 Major products like HSD and furnance oil is imported.
Opportunies,………..
 Confirmed major margins of 3.5 on all regulated products
 Possible privatization in the futre
 Growt opportunities in the near futre
 Growt opportunities in the near futre in te fuel segment .
Threats
 Instability in pricesin international market.
  The threat of reduction in OMC margin By OGRA
 Fall in Economic Growth Rate due to uncertain business
Environment.

Finaancial Analysis
1. Liquidity Ratios,……………………

A fully liquidity analysis requires the use of cash budgets, but by relating
the amount of cash and other current assess to current obligations, ratio
analysis provides a quick, easy-to-use measure of liquidity.
Current ratio,………..
2007
Current ratio= Current Asset /Current Liabilities

Current ratio = 1.22 times

2008

Current ratio= Current Asset /Current Liabilities

Current ratio= 1.24times

ANALYSIS:

In both years the position of the company to pay off its short term debt is
good. It is necessary for the company that its current ratio remains
above 1 time to meet its short term obligations and in the case of PSO the
current of year 2008 is incresing because the current assets increased
more than the current liabilities.
Qick Ratio,…………
2007

Quick ratio= Current Asset- Inventory /Current Liabilities

Quick ratio= 0.64 times

2008

Quick ratio= Current Asset- Inventory /Current Liabilities

Quick ratio= 1 times

ANALYSIS

Here the Quick Ratio of year 2008 is increasing because company is not

holding huge amount of inventory as compared previous year.

Cash Ratio,…………
2007
Cash Ratio= caash+market Securities/Current Laibilities

Cash Ratio =1.22

2008
Cash Ratio= caash+market Securities/Current Laibilities

Cash Ratio =1.24

2.Asset Management Ratio,…
Asset Management Ratio tells us how efficient company utilizes its total

assets for generating sales.

Inventry Turnover ratio,

2007

Inventory turnover = Sales/ Avg inventory

Inventory turnover= 8.731 times

2008

Inventory turnover = Sales/Avg inventory

Inventory turnover= 7.21times

ANALYSIS:

Inventory Turnover Ratio indicates the effectiveness of the inventory

management practices of the firm. The inventory turnover of year 20078
is less than the inventory turns over of year 2007; inventory turnover
ratio of year 2008 was 8.731 times which indicates that 8.731 times in a
year the inventory of the firm is converted into receivables or cash.
However, in 2008, the inventory turnover ratio increased to 7.21 times.
This was due to the fact that the company, in 2007, the sales of the
company decreased.
Fixed Asset turnover Ratio,……..

2007
Fixed Asset turnover= Sales/Fixed Asset

Fixed Asset turnover = 0.97 times

2008
Fixed Asset turnover= Sales/Fixed Asset

Fixed Asset turnover = 0.81 times

ANALYSIS:
The fixed turnover ratio measures how effective the firm uses plant and equipment. The
role of fixed asset is to support the sales. The fixed Asset turnover ratio of year 2008 is
0.81 times and in year 2007 was 0.97 this shows that as there is a decrease in sales or the
fixed assets are increased but can’t boost up sales.

Total Asset turnover Ratio,…………..

2007
Total Asset turnover= Sales /Total Asset

Total Asset turnover = 0.69times

2008
Total Asset turnover= Sales /Total Asset

Total asset turnover = 0.54 times

ANALYSIS:
The final asset management ratio the total asset turn over ratio measures the turnover of
all the firm assets and help us to identify when problem occur that is a problem in fixed
assets or in current assets..
3.PROFITABILITY RATIOS,
This ratio shows the combined effect of liquidity, asset management and
debt management ratios.
Profit margin
2007
Profit margin = Net income /Sales
Profit margin = 28.08 %
2008
Profit margin = Net income /Sales
Profit margin = 18.66 %
ANALYSIS:
Profit margin of year 2008 declined because of the high cost which
occurs because of inefficient operations.

Earning per share Ratio,……

2007
EPS = total shareholder equity attributable to C/s /No of outstanding common
stock
EPS = 3.25
2008
EPS = total shareholder equity attributable to C/s /No of outstanding common
stock
EPS = 1.74
Analysis
Earnings per share ratio (EPS Ratio) are a small variation of return on
equity capital ratio and are calculated by dividing the net profit after taxes
and preference dividend by the total number of equity shares. As its shows
that the earning power of the company has decreased.
 .Table of Contents.
1.History of PSO,
………………………………………..

2.PSO step by step,

…………………………………….

4.Products&services………………………………

5.SWOT Analysis

6.Financial Ratios,…………………………………

 Liquidity Ratios

 Asset Management Ratio

 Profitability Ratio