Shell likely to invest $15m in retail stations to meet enhanced demand

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SOURCEPakistan Today
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KARACHI: Shell Pakistan plans to invest $15 to $16 million in its retail stations, in the wake of expectations of increase in vehicle sales and new investment of automakers in the Pakistani market. Also due to the activities under the China-Pakistan Economic Corridor (CPEC) gain momentum.

The company is pouring fresh capital in an effort to strengthen its presence. The presence is in existing areas of operation and along the CPEC route.

Owing to the new Automotive Development Policy (ADP 2016-21), nearly a dozen automakers are introduced. They are entering into Pakistan’s industry rapidly. These are  encouraged by the incentives offered in the policy. Also due to the positive outlook on the country’s economy.

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According to JS Research, the new entrants will add 60% to the industry’s production capacity over the next few years. “The law and order situation has been improving for the last four or five years. It has also helped expand the economy.”

“Cars and motorcycles are increasing. So, yes, it is a response to the demand pull. Also forecast increase in demand investment.” said Shell Pakistan head of External Relations, Habib Haider, reports The Express Tribune.

He pointed out that the company had not yet set up charging points for electric cars. But, when demand would rise, it may establish charging units at its existing filling stations.

In the budget for the fiscal year 2018-19, the government has tried to promote electric cars. Such promotion paves the way for an increase in the use of environment-friendly vehicles.

Electric cars do not not run on petrol, thus they do not add to the global warming. This is a major concern for those who are struggling to restrict rise in global temperatures.

In this regard, prominent feature of the budget is withdrawal of 16% customs duty on charging stations for electric vehicles. Also, in addition to exemption from 15% regulatory duty, there is a reduction of 25% customs duty on the import of electric cars from existing 50%.

There is an increase in import duty on completely knocked down (CKD) kits for the assembly of electric cars. In the country, it now stands at 10%.

Crippled Energy sector audit by caretakers

According to the International Energy Agency, sales of electric cars around the world has increased. Statistics shown an increase to 54% in 2017.

Future Approach

The White Oil Pipeline Project, which is will cost around $125 to $150 million has 26% shares of Shell Pakistan. This will help transport oil from Karachi to Mehmoodkot near Lahore.

The pipeline will ensure smooth flow of oil without any interruption and will bring down the demand for oil transportation through tankers. Pak Arab Pipeline Company (Papco) is a major shareholder in the project. It holds the stake of 51 percent.

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