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Shell LPG six-month profit up 30 pc

RECORDER REPORT

KARACHI: Shell Gas LPG recorded a 30 percent rise in its net profit in the six months ended December 31, 1999 as compared to previous year.

The Registrar of Companies has approved new name for Burshane (Pakistan) Limited as Shell Gas LPG (Pakistan) Ltd.

According to the David M. Weston, chairman of the company, the sales for the half-year review declined from Rs 131.5 million in 1998 to Rs 111.2 million in 1999. However, net income after tax increased from Rs 9.6 million to Rs 12.5 million. This was due to the restructuring undertaken during last year, resulting in a more efficient organisation. The trading of LPG in Pakistan continues to be heavily regulated by the government. An unrealistic price ceiling has been in force since 1996 and with rising operational costs, imports of LPG base stock have become completely unviable.

To secure flexibility to import LPG base stock in order to enhance business growth and to fulfil commitments to customers, the company wanted change in the existing regulatory mechanism and withdrawal of price ceiling. Representations have been made but without result.

But the company believes that government would implement the plan to deregulate LPG industry as announced by the Chief Executive in its economic package.

The company has held negotiations with Parco Refinery to get additional supplies of LPG, which is expected to be available from October. But the terms unfortunately announced by Parco for block sale/open auction of its LPG production were considered too rigid to be unfavourable for prospective bidders given the existing LPG regulatory mechanism.

The company opts for auction and pursues ministry of petroleum and Parco to review allocation procedure of Parco's LPG production and new terms are expected to be announced by the ministry shortly.