The Pakistan Credit Rating Agency Limited
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Waqas Ahmad

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PACRA Assigns Initial Entity Ratings to My Petroleum (Pvt.) Limited

Rating Type Entity
(27-Sep-22 )
Action Initial
Long Term BBB+
Short Term A2
Outlook Stable
Rating Watch -

The assigned ratings incorporate My Petroleum (Pvt.) Limited’s strong financial strength of the sponsor, evolving retail network, operating efficiency and experienced management team. Sponsor of My Petroleum laid foundation of logistics business which was main transporter for distribution & marketing of LPG. In 2010, sponsor expanded its business activities by incorporating another company for sales & distribution of POL products. Later on, My Petroleum was incorporated in – Jan’16 as an OMC. Key product portfolio of the Company comprises HSD and PMG, being key revenue generators. The ratings factor Company’s arrangement with Lukoil – a Russian lubricant brand, for marketing & distribution of high-performance lubricants across Pakistan. My Petroleum capitalizes on strong managerial support from its sponsor who has significant knowledge in oil procurement and distribution. The Company is positioned at 11th number (MS & HSD) as of June'22. Currently, it has ~5,100MT owned storage facility. The Company is in process of expanding its storage facility at Hibibabad. Management of the Company intends to finance capex through equity. My Petroleum is operating all over Punjab and will be expanding its retail network to Sindh after commencement of operations of storage facility at MirpurKhas. My Petroleum benefits from strategic positioning of stations that it feeds. The Company has planned to aggressively penetrate the retail segment in the growing industry by targeting expansion across semi-urban and rural areas as urban market is highly competitive. The Company has an edge by using a fleet of oil tankers of “My Logistics (Pvt.) Ltd.” (an associated company). Further, the ratings also take comfort from commitment of sponsor to merge other group companies in My Petroleum. The Company has a healthy financial risk profile reflected by low leveraging and strong coverage indicators. The management intends to keep leverage indicators aligned to its risk profile. Moreover, financial flexibility is high, driven by support from sponsor in terms of equity injection coupe with non-funded bank limits.
The rating captures the Company’s ability to sustain its business operations while achieving the aforementioned plans. The rollout of the planned business strategy and sustainable profitability is essential. The rating particularly recognizes ongoing developments including i) equity injection by the Sponsor ii) expansion of retail network iii) group companies’ merger iv) improvement in the governance structure. In addition to the timely implementation of these initiatives, the ratings are dependent on My Petroleum's ability to achieve desired market penetration. Sustainability of bottom-line and key financial metrics, in terms of working capital ratios, financial coverages and gearing, remain crucial to the rating.

About the Entity
My Petroleum (Pvt.) Ltd was incorporated in Jan’16 and commenced its commercial operations in Sep'19. The Company is engaged in the procurement, import, storage, distribution and marketing of POL products and lubricants. It is operating all over Punjab province. It has a total storage capacity of ~5,100 MT located at Habibabad and MirpurKhas.
My Petroleum is a family-owned business, with a major stake held by Mr. Tariq Wazir Ali (91.31%) and his wife (8.69%). The Company has a family dominated BoD, which consists of two executive and three non-executive directors. Mr. Tariq Wazir Ali is the Chairman & CEO of the Company. He is accompanied by experienced professional team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.