Pakistan State Oil and Parco signs accord – Alfalah Securities Limited

Karachi, June 21, 2012 (PPI-OT): Pakistan State Oil (PSO) and Pak Arab Refinery Ltd. (Parco) have signed an agreement to provide petroleum products to PSO from Parco’s mid-country refinery.

According to Alfalah Securities Limited, PSO will get the supply as per its market share. As per the terms of the agreement, PSO will open local Letters of Credit (LC) for Parco which will result in confirmed payments to the refinery in a timely manner thereby enabling Parco to increase its production. This measure would improve the supply of petroleum products to PSO which would be slightly positive for the company. It would also reduce the reliance on fuel imports to some extent as the refinery would be able to work on higher throughput where the benefit is estimated to be of USD 130 mn arising from foreign exchange savings.