Following the easing of the lockdowns after the first wave of COVID-19, a significant increase in the demand for fuel has been observed in Pakistan. Consequently, the petroleum sector saw an 11 percent growth in oil sales between July and November 2020 as reportedly 8.1 million tons of oil were sold during this period.
As per reports, Motor Spirit (MS) and High-Speed Diesel (HSD) are largely responsible for the rise in the demand for oil, having sold 3.4 million tons and 3.1 million tons respectively within the first five months of the current fiscal year of 2020-21 while the demand for furnace oil rose by 31 percent.
Abdul Rafay, an analyst of the industry, has attributed the growth in the demand for oil to the revival of industrial and other business activities in Pakistan following the easing of the lockdowns during mid-2020. He said that the rising demand within the automotive market is also largely responsible for the rise in the demand for oil.
Last month, the sales of the oil marketing companies (OMC) increased by 21 percent to 1.7 million tons on a year-on-year basis. However, the demand for petroleum reportedly increased by only one percent on a month-on-month basis owing to the enforcement of the smart lockdowns following the resurgence of the coronavirus in Pakistan. Hence, monthly sales for MS and HSD came in at 693,000 tons and 802,000 tons, respectively.
Rafay believes that this demand is likely to increase even more with the initiation of upcoming developmental projects and the growing demand from independent energy producers.
He added that with the increase in the sales of vehicles and the impending arrival of new players in the automotive market, the auto industry is also likely to contribute massively to the bump in the demand for oil.