KARACHI: Foreign oil marketing companies (OMCs) have closed down at least 200 petrol pumps across the country in the last one and a half years.

OMCs are also reportedly reducing their workforce under a global programme for reduction in marketing and distribution operations.

Chevron Pakistan Limited, an OMC, had also embarked on its downstream reduction plan, which had translated in significant reduction of staff and closure of its retail outlets.

General Manager External Affairs Shell Pakistan Limited (SPL) Abid Saeed Ibrahim told Dawn that around 50 pumps of the company had been closed in the last one and a half years due to dealers’ malpractices and lease issues mainly. Its current retail outlets are now over 900 in the country. Regulatory authorities have already been informed about the closure of pumps and their explosive licences have been surrendered.

On the job situation he said that the company had outsourced its various jobs and many officials after being relieved from the SPL had joined the outsourced companies.

He said Shell is in the process of divesting its interest in LPG business in Pakistan under a global strategy of focusing on smaller number of large scale businesses.

Sources in oil industry said that in Chevron alone at least 150 petrol pumps since late 2008 have been closed. Currently, its total outlets stand at 550 in the country. Khyber Pakhtunkhaw and Balochistan are the main areas, which have felt the major impact of pumps’ closure.

Smaller towns and cities have similarly been targeted. There were issues of security situation coupled with smuggling of diesel and petrol from Iran in KP and Balochistan.

Sources added the impact is not restricted to the petrol pumps only but highly skilled and qualified workforce has also been affected. For Chevron alone in Pakistan 35–45 per cent of the management and lower staff are likely to leave the company.

The greater concern for the economy is that the funds recovered from the assets sales by these two multinationals are either being repatriated to their principals abroad and are not being reinvested within Pakistan.

Meanwhile, an official spokesman of Chevron Pakistan, when contacted, seemed to deny this altogether saying that all is not true. He did not give any clear answer on pumps closure, divestments and workers’ lay off in the company.

However, he said that Chevron is still a profitable company where optimisation and rationalisation of business are taking place in line with global business strategy.

Regarding downsizing of business departments and closure of pumps, he said that Chevron like other multinational companies take on rationalisation process from time to time in order to stay competitive. For closing of pumps, he added that Chevron reviews the outlets and they continue their operation “if they are profitable”.

Two days back, a Chevron spokesman had said, “We do not comment on market rumors and speculation. Chevron constantly reviews its operations around the world to improve shareholders value. The company has no plans to shut down its operations in Pakistan,” the spokesman said.

Industry sources and latest actions by the company indicate that Chevron is pulling out its stake and investment from marketing and distribution business and moving it into upstream business out of Pakistan. The other actions that are indicative of this are the fact that senior leadership of the company has already been transferred to Dubai and other senior business managers may be leaving the company.
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