The demand for petroleum products in Pakistan during the first month of the fiscal year 2023 has declined by 26 percent on a year-over-year (YoY) basis, dropping to 1,442 kilotonnes (KT) compared to 1,938 KT during the corresponding month of the previous year.
This was revealed in a report published by Ismail Iqbal Securities Limited. The report stated that the decline in demand for petroleum is owing to the higher prices of petroleum products, which have caused lower sales of petrol during the first month of the fiscal year 2022-23.
The decline in the demand was mainly due to a significant decline in all three petroleum products, including High-Speed Diesel (HSD), Motor Gasoline (MOGAS), and Furnace Oil (FO).
During July, High-Speed Diesel (HSD) recorded the lowest monthly sale in the last 18 years. HSD Sales by a staggering 38 percent on a month-over-month (MoM) basis, standing at 444 KT in July 2022 compared to 713 KT during the previous month. Similarly, MOGAS sales declined by 15 percent MoM to 594 KT from 702 KT, whereas Furnace Oil (FO) sales dipped by 23 percent MoM to 350 KT from 453 KT in June 2022.
Likewise, the sale of other petroleum products also saw a decline during the aforementioned period. Sales of High Octane Blending Component (HOBC) also slid as the demand decreased by 19 percent YoY and 27 percent MoM.
The petroleum sales volume of almost all the Oil Marketing Companies (OMCs) saw negative to meager growth rates as the retail market share of state-owned Pakistan State Oil (PSO) decreased by 2 percent MoM.
Limited economic activities due to rising oil prices and inflationary pressure are the chief factor behind this decrease in sales of petroleum products.
Federal Minister of Finance and Revenue, Miftah Ismail, had said that after the removal of the subsidy from petroleum products by the incumbent government, the fuel demand fell in the country. The lower demand due to higher prices led to a lower import bill as well as lower sales of petroleum products.