As per news flow, the Economic Coordination Committee (ECC) met on 31st Oct’22 to discuss energy, petroleum, and commerce matters. At the meeting, the summary of the revision of margins of oil marketing companies was presented by the Ministry of Energy.
The ECC has given the nod to revise the margins to PKR 6.00/ltr from PKR 3.68/ltr.
As per our understanding, the revision in OMC margins will require a final nod from the cabinet. We expect the revision in OMC margins to have an annualized earnings impact of PKR 28.52/share, PKR 19.16/share and PKR 12.54/share on PSO, APL and SHEL, respectively. It pertinent to note that we have assumed a 15% YoY decline in volumes of MS and HSD while calculating the impact on the companies. During 1QFY23, the MS and HSD volumes declined by 21% and 30% YoY, respectively.