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Supply Chain Of Hascol Petrolium

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Muhammad Shahzad

on 3 May 2014

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Transcript of Supply Chain Of Hascol Petrolium



HASCOL Business Structure

The act or process of giving or exchanging of information, signals, messages or ideas as by speaking, gestures or writing.
Communication is the life blood of any organization and its main purpose is to effect change to influence action.
The basic functions of management cannot be performed well without effective communication.


Hascol Petroleum Limited is engaged in the purchase, storage and sale of petroleum products such as Fuel Oil, High Speed Diesel, Gasoline, Jet A-1, LPG and Lubricants.

The company was incorporated in 2001 under the 1984 companies ordinance.

In February 2005 Hascol was granted a full marketing license by the Government Of Pakistan

Hascol has been engaged in developing a retail network under HASCOL brand and by 31st December 2012 we have commissioned over two hundred retail outlets, in the four provinces of Pakistan and Azad Kashmir.

Hascol has also develop storage facilities at Machike and Shikarpur. Hascol has leased tanks at Al-Rahim Terminal.

Hascol has also started to market LPG as an automotive fuel through its retail network
Fuel Business
Lubricant Business
Fuel can be sold in two ways:
Retail Sale
Industrial Sale
 There are eleven OMC’s operating in Pakistan.
 HASCOL petroleum is the fourth largest oil marketing company(OMC) in Pakistan.
 Major competitors are PSO, SHELL, CALTEX.
 Like all other OMC’s HASCOL is not the manufacturer of fuel products.
 HASCOL purchase fuel from NRL, PRL, PARCO and BYCO
 HASCOL have around 250 retail outlets all over Pakistan.

 Fuel business is regulated by government so there is no competition on price among all OMC’s.
 Fuel business is not very profitable as compare to lubricant business they earn hardly 1.5 rupees per liter
 Profitability of all OMC’s is dependent on at what extent the basic infrastructure of company is developed and services they are provided to the customer.
 OMC’s are strongly relying on their supply chain activities or you must say the basic operation of OMC is their supply chain and logistic operations.
 An efficient logistics and supply chain generates higher profit.
 Local refineries are able to cater only 20% of fuel requirement of country remaining 80% of fuel is fulfill by imports.
 There is no customization in fuel products because fuel coming from all refineries meets ASTM standards and having same specification.

 Hascol have very strong network of supply chain and logistics across the country
 An oil marketing company mostly use two modes of transportation:


 Hascol has develop storage facilities at Machike, Shikarpur, Keamari and port Qasim.
 Storage facilities of almost all OMC’s are similar to each other and on same location so supply chain activities of all OMC’s are more or less similar to each other.
 Since petroleum products are highly flammable so transportation by road is not the safest solution in Pakistan.
 As the energy requirement all over the Pakistan increasingly exponentially so in order to cope up these kind of situation there should be a rapid and safest mode of transportation.
 The ideal solution for such kind of problems is proper piping system across the country.
 PAPCO(Pak Arab pipeline company) plays a pivotal role in supply chain of fuel products in Pakistan.
 PAPCO provide the basic infrastructure of piping system to transport fuel.
 PAPCO construct pipeline called “White oil pipeline” it is inter connected with both port Qasim and Kemari ports as well as with NRL, PRL and PARCO.

 PAPCO is the custodian of this whit oil pipeline who is responsible for operation and maintenance of this pipeline.
 By this pipeline we are able to transport fuel from Karachi to Shikarpur & Mahmoodkot.
 It has flexibility to receive imported and locally produced petroleum products from multiple sources and to deliver it at different demand centers
 This system eliminate about 4000 road tankers previously deployed for transporting petroleum products from Karachi to upcountry.
 From these storage facilities fuel is transported to the industrial customers and at retail outlets through oil tankers.

Storage Facilities

HPL has developed state-of-the-art storage facilities at strategic locations that fully cover its retail network. The existing storage facilities currently operating under the banner of HPL are as follows:

In order to further enhance its capacity the Company is in the process of acquiring a land at Mehmood Kot, Punjab adjacent to Pak-Arab Refinery Limited. This will facilitate the Company to cover its supply in the Southern Punjab envelop
Supply Chain Management

• HPL’s Logistics department is the backbone of a company.
• HPL is maintaining its logistics policy where we ensure the deliveries of safe and sound condition to the valued customers.
• Tank Lorries registered with HPL are duly calibrated by weights & measures, and designed as per rules required by 'OGRA' and 'Ministry of Petroleum and Natural Resources'.
• HPL has got 19 registered contractors maintaining a fleet of 1,300 Tank Lorries for Black Oil and 350 Tank Lorries for White Oil.
• HPL all the tank lorries are registered in HPL state of the art ERP system to control the logistics data and product movement and time log, as well.


brand name of FUCHS, a German brand.

Initially HASCOL used to mix
lubricant products and greases together under tool blending agreement.
But now,
Hascol have their own blending plant
Hascol sell their lubricant product to two main:
Either by retail outlet through distributor (B2C)
Directly to industries
Lubricant Business Flowchart
Procurement / Purchasing R.M
Blending Process
Filling Process
Lube Base Oil (LBO) manufacturing
produced by National Refinery Limited (NRL).
Whereas, the deficit is being met by the imports.
Second major and costly R.M for lubricants are “Additives”. But Limited vendors available in Pakistan.

In Pakistan we don’t have many options for LBO purchase so mostly we are relaying on NRL.
Other Purchases
Other major purchases include:
Plastic cans

Vendor selection criteria
Get three competitive quotation from different vendors select one for major purchase.
There is no customization involve in purchase of LBO and additive because they have their own standards given by ASTM (American Society for Testing and Materials)
Customization only involve to the extent of packing material depend on customer demand.
One of the strongest supply chain network

Lubricating oil is combination of LBO and additives. So All production activities carried out at LOBP(lube oil blending plant)
All blended products should meet ASTM standards.
Finished products are distributed through different logistics partners or through company vehicle.

Storage is done according to the grades in the warehouse

Lubricating oil from LOBP is send to filling plant for filling in desired packing.
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