Pakistan is phasing through one of its worst economic instability, and it is apparent by the recent numbers and different incidents. The import has become difficult, the State Bank of Pakistan (SBP) is not issuing LCs, the dollar rate against the Pakistani rupee is still volatile, and the cherry on top is political unrest. The car companies have repeatedly announced production plant shutdowns, especially since the start of 2023. All in all, the situation is bleak.
A couple of days ago, we received good news regarding fuel when the first vessel carrying Russian Oil reached Pakistan with expectations of a price reduction. But, the latest news is not that good as Shell International intends to sell its investment in Pakistan.
Shell Pakistan Statement
In a notification to Pakistan Stock Exchange (PSX), Sell Pakistan stated that during a meeting today, the Board of Directors of Shell Pakistan Limited (SPL) has been notified by Shell Petroleum Company Limited (SPCo) of its intent to sell its shareholding in SPL. “Any sale will be subject to a targeted sales process, the execution of binding documentation, and receipt of applicable regulatory approvals,” the statement read.
However, the company clarified that this announcement doesn’t impact SPL’s current business operations, which continue. “SPL remains committed to continuing to deliver safe and reliable operations for our customers and partners,” the statement read.
According to media reports, SPCo, the immediate parent company, owns 77% of the local operations, which suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables.
What Economists Said?
Ali Khizar, the economist, told PakWheels.com that Shell International had shown the intention to leave. “Someone will buy the operations along with petrol stations,” he added. Meanwhile, PSX investor Abdul Rehman tweeted Shell International intends to sell its investment in Shell Pakistan. “Business confidence in Pakistan is declining in, as OICCI (overseas chamber) survey depicted, 21% decline in business confidence in 2023,” he mentioned.
Shell International intends to sell it's investment in Shell Pakistan‼️
Business confidence is declining in 🇵🇰🇵🇰, OICCI (overseas chamber) survey depicted 21% decline in business confidence in 2023 pic.twitter.com/sxH7auGByj
— Abdul Rehman (@AbdulRehman0292) June 14, 2023
In easy words, Shell is exiting Pakistan. However, it is not clear yet when the company will start the process of selling its shares in the country.
What do you think about Shell leaving Pakistan? Please share your thoughts with us in the comments section.
