Pakistan’s oil sales in May witnessed a 2 percent decline, mainly led by a 7 percent fall in High-Speed Diesel (HSD) sales. HSD sales clocked in at 852,000 tons last month and 919,000 tons in the month before. The decline has been attributed to the Eid holidays during the first week of May when inter-provincial transportation activity subsided.
According to a report compiled by Topline Securities, Pakistan’s oil sales in May 2022 clocked in at 2.1 million tons, up 28 percent year-over-year (YoY), driven by a 174 percent YoY increase in Furnace Oil (FO) and 12 percent YoY HSD sales, respectively.
The government also announced to raise prices of Petrol and Diesel by Rs. 30 per liter (+20 percent), effective from 27 May 2022. This is likely to have reduced demand for Diesel (high base effect) which saw strong sales last month (+33 percent MoM). To recall, high Price Differential Claim (PDC) or subsidy and anticipation of price hike led to a sharp rise in Diesel sales last month.
On the other hand, Petrol sales increased by 3 percent MoM whereas furnace oil sales remained flat during May. During the eleven months of the financial year 2021-22, petroleum sales of the overall sector clocked in at 20.7 million tons (+18 percent YoY), where all three main products grew in double-digits.
MS (petrol) grew by 11 percent to 8.3 million tons, HSD by 18 percent to 8.2 million tons, and furnace oil by 36 percent to 3.6 million tons. This was led by an improvement in economic and transportation activities during the period.
Additionally, total oil sales excluding FO stood at 1.7 million tons in May 2022, up 12 percent YoY and down 2 percent MoM during the period. During 11MFY22, ex-FO sales reached 17.1 million tons, up 15 percent YoY.
The government is still giving subsidies of Rs. 39 per liter on petrol and Rs. 53 per liter on Diesel which will eventually be removed. Going forward, it is expected that these adjustments in prices and a decline in car sales will result in a further slowdown in oil sales.
