Islamabad: 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 in a bid to revive oil sales operations at a time when the country is poised to step up economic activities.
These funds were supposed to be used 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 were seeking bailout package from the government and wanted to defer collection of Petroleum Development Levy (PDL) for six months.
Some industry sources say that employees were sacked following the insistence of Vitol Company which owns 27 per cent shares in Hascol as on December 2018.However, they also argued that coronavirus lockdown was major problem which resulted in dip in demand of petroleum products and sharp decline in oil prices had also led to inventory losses. So, company was forced to lay off employees across the country due to heavy losses.