Shell Pakistan has plans to invest $15 million in retail expansion in Pakistan amid increasing oil demand in the country. The decision came in the wake of increasing vehicles sales and growing automotive industry in Pakistan, the new automakers are also entering into Pakistani market, including United, FAW, Renault and some Chinese manufacturers are also mulling to jump into the lucrative market.
Also, the development under China-Pakistan Economic Corridor (CPEC) also requires an abundant supply of oil in the country as demand has to increase.
The oil demand in Pakistan has soared to an unexpected level in the past five years, according to the report BP statistical review of energy Pakistan’s oil consumption from 2014 to 2018 is almost increased by whopping 33.20%.
The chart below shows the total oil consumption from 2014 to 2018,
Shell Pakistan has observed the growing oil demand and consumption in the country and the firm is ready to pour investment to expand retail outlets in the existing areas of operation as well as along the CPEC route.
The new Automotive Development Policy (ADP 2016-21) would allow almost dozen automakers to grab the Pakistani market. The new entrants will add 60% to the industry’s current production capacity over the next few years.
The head of Shell Pakistan External Relations, Habib Haider said, “All types of vehicles in Pakistan are increasing. So yes, we are responding to the demand pull and forecast increase in demand investment.” He also mentioned that Shell Pakistan has not yet devised a plan to install charging units for electric cars, but Shell might install the points at existing filling stations if demand increases.”
Electric cars are not much popular in Pakistan but if there is a fierce competition among automakers which is inevitable in the next few years, introducing electric cars would become a norm. According to the data acquired from International Energy Agency, electric car sales globally rose by 54% in 2017.
Shell Pakistan holds 26% of shares in white oil pipeline project from Karachi to Mehmoodkot near Lahore, the project will incur $125 to $150 million in costs. The pipeline project will ensure smooth flow of oil without interruption, it will help in bringing down the cost as well as oil consumption which is required to transport oil through large tankers. Pak Arab Pipeline Company (Papco) is the major shareholder in this project having 51% of stakes.