Hascol Petroleum lays off 400 employees

Aftab Ahmed

As Cash-strapped Hascol Petroleum continues to face heavy losses, it lays off 400 employees across the country.

There had been hopes that its financial health will improve after Vital Dubai had acquired shares. But the company continues bleeding.

In a desperate move to improve financial health, Hascol Petroleum had raised Rs7.91 billion from corporate and retail shareholders in January this year to improve working capital and procure products. It raised funds to revive oil sales operations at a time when the country poised to step up economic activities.

Hascol Petroleum raised these funds to use for working capital requirements of the company,” Hascol General Manager Legal and Company Secretary Zeeshanul Haq had informed the Pakistan Stock Exchange (PSX) in a statement.

According to the company management, a more conservative approach had been taken in the import of products and higher reliance had been allocated to local availability of products from the refineries and less on imports.

However, despite raising funds, it could not improve financial health with the outbreak of Covid-19 that had entirely hit the oil industry. The oil industry had suffered heavy inventory losses and was seeking a bailout package from the government and wanted to defer collection of Petroleum Development Levy (PDL) for six months.

Some industry sources say that Hascool Petroleum sacked employees following the insistence of Vitol Company which owns 27 percent shares in Hascol as of December 2018. However, they also argued that coronavirus lockdown was a major problem that resulted in a dip in the demand for petroleum products and a sharp decline in oil prices had also led to inventory losses. So, the heavy losses forced the company to lay off employees across the country.

During the last few years, the company has expanded its network of retail outlets. However, it is still facing a financial crunch and unable to come out of the woods.