Auto sales surge, petrol sales hit historic high in tandem

KARACHI: Brisk auto sales pushed petrol sales to an all-time high of 0.81 million tonnes in July 2021, up 12.5 per cent year-on-year (YoY) and 4pc month-on-month (MoM).

Overall, oil industry sales swelled by 16pc YoY to 1.94 million tonnes in July from 1.66m tonnes in the same month last year.

High speed diesel (HSD) sales grew by 7pc to 0.72m tonnes in July 2021 from 0.68m tonnes in July 2020. However, HSD sales fell by 7pc to 0.78m tonnes in June 2021 when compared with July 2021 figure.

Furnace oil (FO) sales posted a whooping growth of 54pc to 0.37m tonnes from 0.24m tonnes in July 2020. On MoM basis, FO sales grew by 8pc.

Head of Research at Pak Kuwait Investment Samiullah Tariq said a massive drop in smuggling of Iranian petrol either because of issues in Iran or strict border vigilance by the Pakistani government has boosted demand of local petrol.

Citing another reason for rising petrol sales, he said a large number of people had opted for travelling to the northern areas in July. On FO sales growth, he said that LNG issues had kept the demand up for the fuel.

Head of Research at Arif Habib Limited (AHL) Tahir Abbas said one of the main reasons of thriving petrol sales in July was growing sales of cars followed by rising travelling of people to northern areas by road.

“Many FO-based power plants had resumed their operations in July 2021. Suspension of RLNG supply in the first week of July also pushed up FO sales for power generation,” he added.

The auto sales picture is likely to become clearer after the release of July 2021 sales data by the Pakistan Automotive Manufactures Association (PAMA) in the second week of this month.

Meanwhile, Indus Motor Company (IMC) CEO Ali Asghar Jamali said, “IMC has achieved record breaking sale of 6,775 units in July 2021 – the highest since its inception in 1993.”

As per PAMA data, car sales had jumped by 56.7pc in FY21 to 151,182 units from 96,455 units in FY20. Cut in the price of cars due to lowering of taxes and duties by the government has also fueled additional auto demand followed by record high auto-financing of Rs308 billion as of June 2021 owing to low interest rates.

Soaring two-wheelers sales have also been jacking up petrol demand. According to figures of Large Scale Manufacturing (LSM), total bike production in July-May FY21 rose by 41pc to 2.282m units from 1.623m units in the same period last fiscal.