Petroleum Sales Up 7% in November After a Gap of 18 Months

The petroleum, oil and lubricant (POL) sales during the month of November increased by 7% to 1.42 million tons as compared to 1.33 million tons in November of 2018 as petrol, high-speed diesel (HSD) and furnace oil (FO) sales rose by 7%, 4% and 8% respectively. A major increase after a gap of 18 months.

However cumulative POL sales during the five-month period (5MFY20) period depicted a decline of 8% YoY to 7.563 million tonnes on an industry-wide basis as HSD sales declined by 11% followed by 24% fall in FO sales to 1.1 million tonnes, while petrol sales grew by 4% to 3.226 million tonnes.

FO sales declined by 24% in five months as compared with the same period last year due to its lower requirement in power generation after the availability of relatively cheaper fuels like regasified liquefied natural gas (RLNG) and coal. Although insignificant on a yearly basis, November sales improved by 8% to 144,000 tonnes. Additionally, as the power demand declines with the winter season setting in, demand is expected to remain constricted.

According to the Top Line Securities report, the diesel sales, although up by 4% YoY in November, fell 15% month-on-month due to smuggling from the Iranian border. The Iranian border issue is rearing its head again as 5MFY20 volumes dropped by 11% to 2.8 million tonnes.

In petrol, Pakistan State Oil (PSO) managed to maintain its market share at 38% while Hascol’s market share clocked in at around 8% in November after three lean months at the start of the fiscal year – averaging at 4.5%.

According to Topline Securities, in High Speed Diesel, PSO outperformed the competitors as the company’s market share grew from 43% to 46% in the last month. Attock Petroleum Ltd’s share also improved to 10% but Hascol and Shell Pakistan lost out as their shares clocked in at 8% and 6% respectively in November.

Topline’s report identified some key risks to the oil sector which included a further slowdown in the economy, an increase in turnover tax, and currency depreciation.