Will PSO go for backward integration?

If things go as planned in the budget, petroleum products may be cheaper in Karachi than in the remote areas of Khyber-Pakhtoonkhwa and Balochistan.
The price inequality is likely to result if the proposed deregulation of Inland Freight Equalization Margin (IFEM) is actually acted upon, which has also raised rumours that PSO is considering buying a refinery.
In a statement issued to shareholders, PSO did not deny its interest in acquiring higher stake in Pakistan Refinery Limited (PRL), neither did it rule out other options. However, one wonders, what other options does PSO have for backward integration. Not many but PRL alone, which is why the rumours seem to have substance.
A cursory look at the oil marketing players reveals that most of them have refineries of their own like BYCO, APL and Total.
So, PRL is the only option left for PSO in which Shell and Chevron have a combined stake of 42 percent. Regardless of what PSO is thinking, both Shell and Chevron will have to willfully dilute their stake in PRL, if the deal is to materialize.
It is hard to believe that Shell and Chevron would let go of their stake in PRL, especially when Shell itself is not integrated backwards. Secondly, market shares of both PSO and Shell are on a decline, unlike the backward integrated APL, which highlights the importance of owning a refinery.
What price should PSO pay is a mighty tricky question. There has been no consensus whatsoever in the market over the possible acquisition price.
Estimates vary from as low as Rs1-4 billion to as high as Rs16 billion - and also an abnormally high amount of Rs56 billion, though the latter seems absurd given that PRLs market cap is Rs3.6 billion.
Bear also in mind that PRL, like most of its peers is a loss making refinery. And worst of all, its product mix is heavily tilted towards furnace oil, which happens to be the lowest refining margin product and currently has negative margins.
Indeed, PSO wouldn be paying too high a price for a company whose plant needs massive investment to alter the product yield and make it a viable business.
On a positive note, the cash-starved state-owned oil marketing company wouldn mind being assured of uninterrupted fuel supply in current times of circular debt. However, it might not add much value to the shareholders in the near to medium term, given the amount of time and investment needed to convert the product mix into profitable terms.
There is no denying the significance of backward integration for PSO in order to arrest the fall in market share. Will PSO go for it? Will Shell and Chevron give up their stakes? Will PSO end up paying higher price in desperation to maintain its market share? These are just few of the rambling on shareholders minds.