PACRA Maintains the Rating of Gas & Oil Pakistan Limited | PP Sukuk

Gas & Oil Pakistan Limited ('GO' or 'the Company') benefits from a strategic partnership with Aramco, which acquired a ~40% stake in the Company. Aramco, a globally significant player in the energy and chemicals sector, continues to reshape the dynamics of Pakistan's OMC sector and reinforce GO's expanding market position. GO benefits from the financial strength and industry expertise of its sponsors, complemented by enhanced governance through Aramco's participation at the Board and management levels. GO's operational infrastructure reinforces its competitive positioning. The Company maintains a retail network of ~1,329 stations, including ~80 COCO sites a growing proportion of which have been rebranded under the Aramco banner. GO holds one of the largest storage capacity in the sector at ~205,038 MTs, a strategic asset that enhances supply reliability, supports working capital efficiency, and provides a meaningful buffer against procurement and logistics disruptions. Operations cover the POL value chain procurement, storage, distribution, and marketing, with sourcing across both domestic and international channels. Ancillary hospitality income from retail sites provides an additional, albeit modest, revenue stream. Looking ahead, the planned entry into the lubricants segment through a tie-up with Valvoline is expected to further broaden the Company's product proposition and revenue base.
GO's topline trajectory in CY25 was compelling. Net revenue surged ~89% YoY to PKR 619.6bln (CY24: PKR 327.8bln), driven primarily by robust volumetric expansion that has firmly established the Company among the top-tier OMCs by both sales volume and retail presence. Despite a slight contraction in margins, profitability improved on the back of strong sales growth, with scale effects largely offsetting underlying cost pressures. The Company's financial risk profile remains stable, underpinned by strong operating cash flows notwithstanding a highly leveraged capital structure. Working capital requirements are met through conventional financing channels, supplemented by a newly introduced stream of commercial borrowings. A substantial supplier credit extended by Aramco provides an additional liquidity cushion, reducing reliance on short-term market borrowings. Despite geopolitical disruptions around the Strait of Hormuz, GO's robust storage, diversified procurement, disciplined sourcing, and strategic association with Aramco support supply resilience.
The ratings are dependent on the Company's ability to sustain its business profile, while maintaining the profitability matrix at an optimal level. The sustainability of margins and improvement in coverages, while expanding business volumes, remain critical. Adherence to the debt matrix at an adequate level is a prerequisite for the assigned ratings

About the Entity
Gas & Oil Pakistan Limited ('GO' or 'the Company') was incorporated as a public unlisted company in 2012 under the repealed Companies Act 2017. The Company has a ten-member Board; four members represent Aramco, and the other six are nominated by GO. Mr. Shahid Mehmood Khan chairs the Board, while Mr. Khalid Riaz heads the Company as the CEO. To enhance transparency, a few prominent management positions are appointed by Aramco.

About the Instrument
In Dec-21, GO issued a rated, secured, privately placed sukuk with a total value of PKR 2.5bln. The sukuk offers a rate of 3-Month KIBOR + 1.75% per annum and has a five-year tenor. Redemption of the sukuk will occur in sixteen equal quarterly installments. To ensure the upcoming coupon payments, the Debt Payment Account (DPA) is funded 100% from a designated account 30 days before each coupon payment date. GO has demonstrated strong financial discipline through timely settlement of obligations, reflecting effective liquidity management. The Company has recently made markup payments of PKR 23.9mln on 31st Dec-25, and PKR 18.7mln on 31st Mar-26. Additionally, two principal installments of PKR 156.2mln each were paid on 31st Dec-25 and 31st Mar-26 respectively.