Islamabad: The Pakistan Credit Rating Agency Limited (PACRA) has retained the entity ratings of My Petroleum (Pvt.) Limited, affirming its long-term rating at BBB+ and short-term at A2 with a stable outlook. The decision reflects the consistent financial indicators despite the notable challenges in Pakistan’s energy sector, characterized by decreased consumption and reliance on imports.

According to The Pakistan Credit Rating Agency Limited, My Petroleum has maintained its ratings amidst a significant decline in the national consumption of petroleum, oil, and lubricants, which dropped approximately 25.5% to 17.1 million metric tons in FY23 from 23.1 million metric tons in FY22. The decrease primarily resulted from unstable economic conditions and shifts in government policy, affecting industries such as transportation and power which are the primary consumers of these products. Despite these challenges, the company has managed to sustain its market presence, holding approximately 0.4% share and supported by its expansion across semi-urban and rural areas.

The ratings derive strength from My Petroleum’s diverse business operations and the strategic backing of its sponsors with significant interests in logistics, trading, energy, and steel sectors. Financially, the company has demonstrated resilience through improved margins obtained by procuring products at lower costs and managing exchange risks associated with heavy reliance on imports. The integration of My Logistics into My Petroleum is seen as a critical factor for future performance, with a focus on aligning leveraging indicators with the company’s risk profile.

As My Petroleum plans further penetration into the retail market and improvements in financial management, PACRA’s stable outlook indicates a belief in the company’s capacity to navigate economic uncertainties while pursuing growth. Sustainable profitability and effective management of working capital and debt coverages are deemed essential for maintaining the current ratings.