- Margins, competition, regulatory challenges, economic impacts, trade dynamics and energy security need to be managed properly
Interview with Mr. Khalid Tawab — Chairman, Tawab Group of Companies
PAGE: Tell me about yourself, please:
Khalid Tawab:Â I am Chairman of the Tawab Group of Companies, a renowned name in the manufacturing of paper, board, and steel. I have served as the Senior Vice President and Vice President of FPCCI (Federation of Pakistan Chambers of Commerce and Industry) and the Karachi Chamber. I have been the honorary Consul General of Mozambique since 1989.
In recognition of my outstanding public services, I was awarded the Sitara-e-Imtiaz by the President of Pakistan in 2009. My company has received the FPCCI Exports Award twice and the International Asia Award once for the highest exports.
I am also a philanthropist and a trustee of the Aiwan-e-Tijarat-o-Sanat Hospital. I have had the privilege of serving as a Minister in the caretaker government. Presently, I am chairman of the Audit and Finance Committee of FPCCI — the most important committee of FPCCI.
PAGE: Your perspective on margins to petroleum dealers and oil marketing companies:Â
Khalid Tawab:Â Margins for petroleum dealers and oil marketing companies are influenced by market dynamics, regulatory guidelines, and industry practices. It’s essential to strike a balance between ensuring fair profitability for these entities and maintaining affordability for consumers. Any adjustments to margin levels should be carefully evaluated to avoid adverse effects on stakeholders and market stability.
PAGE: What role are smaller OMCs playing in the sector and how do they survive in the competitive environment?
Khalid Tawab:Â Smaller oil marketing companies play a vital role in the petroleum industry by providing competition, innovation, and niche services. To survive in the competitive environment, they often focus on niche markets, regional presence, or specialised services. They may also emphasise cost-efficiency, customer service, and strategic partnerships to differentiate themselves. In addition, leveraging technology and optimising operational efficiency help smaller companies remain competitive despite their size.
PAGE: What contribution does the Competition Commission of Pakistan make when it comes to protecting the end users?Â
Khalid Tawab:Â The Competition Commission of Pakistan (CCP) plays a crucial role in protecting end users by ensuring fair competition in the market. It prevents anti-competitive practices such as price fixing, bid rigging, and abuse of dominant positions, which can harm consumers. By promoting fair market competition, the CCP helps prevent monopolistic behaviour, encourages innovation, and ensures that consumers have access to a variety of choices at competitive prices. This ultimately benefits end users by promoting consumer welfare and empowering them with access to better products and services.
PAGE: Import and consumption trends of crude oil and refined petroleum products fluctuate with economic cycles. How would you comment from the perspective of Pakistan?
Khalid Tawab:Â In Pakistan, the import and consumption trends of crude oil and refined petroleum products are closely linked to economic cycles. During periods of economic growth, there is typically an increase in industrial activity, transportation, and overall energy demand, leading to higher imports and consumption of petroleum products. Conversely, during economic downturns, there tends to be a decrease in energy demand as industries scale back production and consumer spending declines.
From the perspective of Pakistan, these fluctuations in import and consumption trends have significant implications for the economy. As a net importer of crude oil and petroleum products, Pakistan’s trade balance is impacted by changes in oil prices and consumption levels. Higher oil prices can strain the country’s foreign exchange reserves, especially if import volumes remain high during periods of economic slowdown.
Moreover, fluctuations in oil prices can also affect inflation rates, as energy costs influence the prices of goods and services throughout the economy. This can have implications for monetary policy and overall macroeconomic stability.
In addition, Pakistan’s energy sector is heavily dependent on imported petroleum products for power generation, transportation, and industrial use. Fluctuations in oil prices and consumption trends can therefore impact the cost of energy production and distribution, influencing the competitiveness of industries and the overall cost of living for consumers.
In short, the import and consumption trends of crude oil and refined petroleum products in Pakistan are closely tied to economic cycles and have significant implications for trade balances, inflation, energy costs, and overall economic stability.