Petroleum sales rebound after 18 months

KARACHI: After a gap of more than 18 months, petroleum, oil and lubricant (POL) sales increased by seven per cent year-on-year in November as petrol, high-speed diesel (HSD) and furnace oil (FO) sales rose by 7pc, 4pc and 8pc respectively.

On the other hand, cumulative POL sales during the 5MFY20 period fell by 8pc YoY to 7.563 million tonnes on an industry-wide basis as HSD sales declined by 11pc followed by 24pc fall in FO sales to 1.1m tonnes, while petrol sales grew by 4pc to 3.226m tonnes.

Fawad Bashir of Top Line Securities said diesel sales, although up by 4pc YoY in November, fell 15pc month-on-month due to smuggling from Iranian border. The Iranian border issue is rearing its head again as 5MFY20 volumes dropped by 11pc to 2.8m tonnes.

FO sales declined by 28pc (November) due to its lower requirement in power generation after availability of relatively cheaper fuels like regassified liquefied natural gas (RLNG) and coal. Although insignificant on yearly basis, November sales improved by 8pc to 144,000 tonnes. Additionally, as the power demand declines with winter season setting in, demand is expected to remain constricted.

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

In HSD, PSO outperformed the competitors as the company’s market share grew to 46pc from 43pc last month.

Attock Petroleum Ltd’s share also improved to 10pc but Hascol and Shell Pakistan lost out as their shares clocked in at 8pc and 6pc respectively in November.

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

Moreover, BMA Capital Management’s Yusuf Rahman said petrol sales during the 5MFY19 period jumped by 4pc with the increase likely emanating from a hike in CNG prices, compelling car users to revert back to motor gasoline.

He attributed lower HSD sales in the last five months to slowdown in the country’s economic activity coupled with smuggling of Iranian diesel, causing the overall fall in the commodity’s demand.

He said FO continued its slump as the demand for FO-based generation continues to be substituted by more efficient fuel sources such as coal and RLNG.