Shell Pakistan Limited, a subsidiary of Shell Petroleum Company Limited UK has announced its decision to shut down its business operations from Pakistan .
The Secretary of Shell Pakistan Limited informed In a letter to the General Manager of Pakistan Stock Exchange Limited that in the meeting of the Board of Directors of the Shell Petroleum Company Limited (SPCO) in Pakistan has expressed its desire to sell its shares.
The announcement of Shell Petroleum Company, a British firm that is involved in the oil and gas business in Pakistan for a very long period, to close down its operations from here has raised concerns among experts. former Federal Secretary of Petroleum Dr. Gulfaraz Khan said in this connection, “I fail to understand why Shell is leaving the lucrative oil and gas market in Pakistan for unknown reasons.”
Speaking to the media, he said that Shell is only engaged in the business of refining oil and transporting products, which is a profitable venture. “Shell has been associated with oil exploration in Pakistan for a long time, but that’s a thing of the past. Now they are only involved in downstream operations (refining and transportation),” he added.
Dr. Gulfaraz mentioned that Pakistan imports only one lakh barrels of oil from Russia, while the market is much larger, and Shell’s health is not affected in such a significant market.
“One possible reason for Shell’s exit from Pakistan could be administrative or governmental issues. But Shell is such a large company that it does not give much importance to such minor matters.” Gulfaraz added
Ilyas Fazil, a researcher affiliated with the Institute of Policy Studies Islamabad (IPRI), also expressed surprise and confusion upon hearing the news of Shell’s departure from Pakistan. He said, “Multinationals are leaving Pakistan, and now Shell has decided to sell its shareholding. The reasons include an extremely uncertain political environment, regulated markets, capital controls, income restrictions, policy inconsistencies, and excessive taxes. Companies like Shell disinvestment will send a strong negative signal and indicate complete distrust in the fascist government of Shahbaz Sharif.”
Some circles believe that the major reason for Shell’s departure from Pakistan could be the entry of Russian oil into the country. However, Dr. Gulfaraz dismissed any connection between Russian oil imports and Shell’s exit from the country.
He stated, “Even if Shell had objections to Russian oil, there were several other easier ways to express them. What led to the closure of their business?”
Last month, Shell Pakistan Limited announced its financial performance for the first quarter of 2023, which was severely affected by the ongoing economic crisis in the country.
It is the political instability, feeble economy, currency depreciation, adhoc & short term policies and corrupt practices in the government sector that is leading the country towards default. The going away of international investment is the sign that the gigantic company like Shell working in the energy sector is leaving the country that there is nothing left for them here.
Now it is a very alarming situation. It is a fact that the politically stable country can only transform into heaven for direct investment and unluckily Pakistan has been facing political instability for a long time. Time has proven that the PDM led government would be remembered as the most incapable and corrupt government in history ever. It is high time to finish the blame game and take some measures to manage the fallen economy.