Leading oil company Shell plans to exit Pakistan, according to sources in the country’s market.
Shell Petroleum Company Limited — the parent company of Shell Pakistan (SPL) — has notified its intent to sell its shareholding in the local unit, through a notice sent to the Pakistan Stock Exchange (PSX) on Wednesday.
According to the company, rising inflation and continuing instability of dollar/rupee value are disturbing the company.
The oil firm, in its filing to the stock exchange, said: “We hereby inform you that the Board of Directors of Shell Pakistan Limited (SPL), in a meeting of its Board, held on June 14, 2023, have been notified by The Shell Petroleum Company Limited (SPCo) of its intent to sell its shareholding in SPL.”
Last month, Shell Pakistan Limited announced its financial performance for the first quarter of 2023, which was severely impacted by the ongoing economic crisis in the country.
The loss came on the back of an unprecedented devaluation of the rupee, rising inflation and macroeconomic uncertainty.
‘PAK Lost USD 3.7 Billion in 11 Months’
Pakistan lost at least USD 3.7 billion in the first 11 months of the current fiscal year as expatriates used unofficial channels for remittances due to the huge exchange rate gap, the cash-strapped country’s central bank has said.
The Pakistani rupee has been in a state of freefall for most of the year due to pressure on the depleting foreign exchange reserves, creating a difference between the inter-bank and private money market exchange rates.
Data released by the State Bank of Pakistan (SBP) on Tuesday showed that the country lost USD 3.7 billion in remittances during the first 11 months of FY23 mainly due to a widening exchange rate gap.
Overseas Pakistanis who sent money to their relatives and families apparently resorted to unofficial channels to transfer funds, causing a loss to the official remittances that majorly contribute to helping support the balance of payments, the Dawn newspaper reported.
It said the remittances sent by Pakistani expatriates dipped month-on-month by 4 per cent and 10 per cent year-on-year to USD 2.1 billion in May.
The inflows tumbled by 12.98 per cent to USD 24.831 billion in 11 months of FY23, compared to USD 28.489 billion in the same period last fiscal year.
Pakistan received USD 2.102 billion in May compared to USD 2.198 billion in April. received USD 2.34 billion in May last year.
The dip comes as Pakistan is struggling hard to get a USD 1.1 billion tranche from the International Monetary Fund (IMF) for nearly a year.
Pakistan’s efforts to unlock access to the already agreed USD 6.5 billion loan package with the IMF are in a quagmire as the country’s recently released budget needs to satisfy the global lender to secure the release of more bailout money for the cash-strapped country.
With PTI Inputs
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