Pakistan’s petroleum sales witnessed a significant decline of 39 percent on a year-over-year (YoY) basis and stood at 1.11 million tons during March 2023 compared to 1.82 million tons during March 2022.
According to Topline research, the drop is mainly due to lower demand for furnace oil for power generation and a slowdown in overall economic activity due to the Ramadan effect. Additionally, this is the lowest monthly sales number in 35 months, since Feb-Apr 2020.
The total sales volume in July-March 2022-23 (9MFY23) declined by 21 percent YoY to reach 12.8 million tons, according to data by Arif Habib Limited (AHL).
Furnace Oil (FO) sales plummeted by 70 percent YoY, while High-Speed Diesel (HSD) offtake slid by 43 percent on a YoY basis in September. The sales of Motor Spirit (MS) also witnessed a decline of 28 percent YoY.
The decline in diesel sales across all markets suggests that diesel is being smuggled from Iran to Pakistan via the Iran-Pakistan border.
On a month-over-month (MoM) basis, the overall fuel sales showed a decline of 9 percent.
During the nine months of the financial year 2022-23 (FY23), MS petrol sales witnessed a decline of 16 percent YoY, reaching 5.59 million tons. HSD sales suffered the second biggest blow with a decline of 24 percent on a YoY basis, while FO sails slid by 33 percent YoY.
The company-wise analysis shows that Pakistan State Oil (PSO) sales declined by 44 percent YoY in March 2023. Under the government-run entity, MS sales witnessed a decline of 26 percent YoY, reaching 0.25 million tons. HSD sales declined by 45 percent on a YoY basis, while FO sales collapsed by 91 percent YoY. Meanwhile, the overall sales volume under PSO during 9MFY23 declined by 20 percent YoY to 6.48 million tons.
Sales under Attock Petroleum Ltd. (APL) registered a significant decline of 30 percent on a YoY basis in March 2023 on the back of decreased FO, HSD, and MS sales by 32 percent, 39 percent, and 21 percent, respectively. During July-March FY23, overall sales took a 21 percent hit amid stunted offtake of MS, HSD, and FO.
Shell’s offtake declined by 38 percent YoY in March 2023 as the sales of HSD and MS dipped by 46 percent and 30 percent, respectively. For 9MFY23, overall offtake dropped by 23 percent YoY on the back of low MS and HSD sales.
Conversely, HASCOL’s sales increased by a massive 237 percent on a YoY basis in March. During the period in review, MS sales witnessed an increase of 259 percent YoY, reaching 0.03 million tons, while HSD sales showed a 211 percent YoY growth. The company’s sales increased by 9 percent YoY to 0.24 million tons for the nine months that ended on March 31st, 2022-23.
Overall FY23 oil sales may drop by 20-25 percent YoY, mainly due to the overall slowdown in the economy. Demand will continue to remain muted due to elevated inflation levels and the inability of the government to provide any relief in oil product prices.