PACRA Maintains Entity Ratings of Total PARCO Pakistan Limited

Total PARCO Pakistan Limited's (“Total PARCO” or “the Company”) ratings reflect its association with TotalEnergies Marketing Services (TMS) and Pak Arab Refinery Limited (PARCO). The two sponsors are considerably strong across the energy supply chain and are financially stable. Total PARCO is the largest international oil marketing company (OMC) operating in Pakistan. This along with holding the second largest market share in the local OMC sector provides Total PARCO room to support the regulators; thus has the ability to impact the overall structural landscape of the downstream oil marketing sector. The assigned rating also incorporates the Company's adept management of business and financial risks. Notably, the sustainability of the topline and profits; along with the strategic decision to retain profits over an extended period strengthened the Company's overall financial footing. Despite a considerable hike in PoL prices in a regulated price environment, the Company was successful in delivering strong financial performance. Total PARCO's marketing and operations generate fairly stable cash flows, despite the volatility in international oil market prices and other persistent risks. Maneuvering its strategy around the concept of a ‘Service Station’ rather than a ‘Petrol Pump”, Total PARCO aims to build & retain its customer base by developing brand loyalty that goes beyond transactional. In order to remain aligned with the contemporary world’s energy needs, the Company has a clear view on the global energy transition.
The rating also remained cognizant of the strategic initiatives of Total PARCO, which inter alia includes the construction of new storage sites, expansion in production capacity of the lubricants plant, sustainable development goals and initiatives towards its corporate social responsibilities. The Company's sound governance framework and control environment augurs well for smooth & compliant business operations. Deployed IT infrastructure at the group level is considered robust, mitigating any business interruption risk.

About the Entity
Total PARCO Pakistan Limited (“Total PARCO” or “the Company”) is an unlisted public limited company. The principal activity of the Company is the marketing and sale of petroleum products. It has a six-member Board. Three members represent Pak Arab Refinery Limited (PARCO) and the other three are nominees of TotalEnergies Marketing and Services (TMS). The Chairman, Mr. Momin Agha, is nominated by PARCO, while the CEO, Mr. Asif Iqbal, is appointed by TMS. Other members of the management are also seasoned professionals.