CCP approves Aramco’s stake purchase in Pakistan’s GO Petroleum

The Competition Commission of Pakistan (CCP) has given the green light to Saudi Aramco for acquiring a significant 40% stake in Gas & Oil Pakistan Ltd. (GO), facilitating Aramco’s first venture into Pakistan’s retail fuel market. This approval marks a pivotal development in strengthening economic ties between Saudi Arabia and Pakistan, showcasing confidence in the growing potential of Pakistan’s energy sector.

Aramco, through its subsidiary Aramco Asia Singapore Pte. Ltd., completed the necessary pre-merger procedures with the CCP, highlighting its expertise in the global energy market and adherence to regulatory expectations. The CCP’s review ensured that the acquisition would not result in undue market dominance or hinder competition within the relevant sectors.

Gas & Oil Pakistan Ltd., a prominent player in the Pakistani oil market, operates an extensive network of downstream fuels, lubricants, and convenience stores. The firm’s substantial market presence made it an attractive partnership for Aramco, aiming to leverage GO’s established infrastructure to distribute its products effectively across the region.

“Our second planned retail acquisition this year aligns with Aramco’s downstream expansion strategy, with a clear path ahead for growing an integrated refining, marketing, lubricants, trading, and chemicals portfolio worldwide. GO has significant storage capacity, high-quality assets, and growth potential, which will help launch the Aramco brand in Pakistan,” said Mohammed Y. Al Qahtani, Aramco Downstream president, said when the deal was announced in December 2023.

The acquisition is a pivotal step for Aramco, enabling the company to secure additional outlets for its refined products. It also opens new market opportunities for Valvoline-branded lubricants, following Aramco’s acquisition of the Valvoline Inc. global products business in February 2023.

The CCP’s analysis concluded that the merger would foster competitive conditions, potentially lowering prices and improving service quality for consumers by introducing international standards and practices. This decision is in line with the CCP’s commitment to promoting fair competition and regulating mergers and acquisitions to prevent any actions that might lead to market monopolies.

Pakistan’s Competition Act, 2010, prohibits undertakings from abusing a dominant position in the market, participating in anti-competitive agreements, and resorting to deceptive marketing practices that could result in a transaction based on incorrect or inaccurate information. The Competition Commission of Pakistan reviews mergers between undertakings that could result in significant impediments to effective competition. Through advocacy, the commission encourages voluntary compliance and promotes a ‘competition culture’ to take root in the economy.