CCP approves Saudi group’s takeover of Shell Pakistan

The Competition Commission of Pakistan (CCP) on Saturday approved the takeover of Shell Pakistan by Saudi Group Asyad Holding through UAE-based Wafi Energy Holding Limited. The CCP said the move would strengthen the country’s oil retail sector.

Shell Petroleum Company announced its exit from Pakistan in June 2023 by selling 77.42% stake in local utility Wafi Energy. The move comes after several global operational announcements by Shell and losses incurred by Shell Pakistan in 2022 due to currency fluctuations, devaluation of Pakistani rupee and past due receivables.

Wafi Energy, a wholly owned subsidiary of Saudi Arabian fuel retailer Asyad Holding Group, will acquire Shell Pakistan’s operations, which include over 600 service stations, 10 fuel terminals, a lube oil blending plant and a 26 percent stake in Pak-Arab Pipeline Company Limited.

“The Competition Commission of Pakistan (CCP) has approved the acquisition under Section 11 of the Competition Act, 2010, thereby solidifying the transaction aimed at strengthening the petroleum retail sector in Pakistan,” CCP said in a press release.

CCP highlighted that Shell Pakistan maintains a “significant business presence” in the retail supply of motor fuels and lubricants across Pakistan. It also noted that Wafi Energy specializes in managing and operating fuel stations in Saudi Arabia.

In the first phase of the Commission’s assessment, the relevant product markets were identified as retail fuels, automotive lubricants and industrial lubricants.

“It was also disclosed that Shell Pakistan has separate market shares in all three material markets, which will not change post-transaction,” CCP said.

“The analysis further confirmed that Wafi Energy Holding Limited would not acquire a dominant position in the relevant markets even after acquiring direct control of Shell Pakistan.”

Chinese Communist Party (CCP) Chairman Dr Kabir Ahmed Sidhu said the move is likely to increase competition by raising service standards in the fuel retail supply chain and will significantly contribute to the growth of the Pakistani market.