Petroleum sales in Pakistan decline by 34% due to high prices

ISLAMABAD: In a stark contrast to the previous year, the oil marketing companies (OMCs) in Pakistan experienced a significant setback as their sales plummeted by 34 per cent year-on-year (YoY) in September 2023.

The figures stood at 1.01 million tonnes (MTs) compared to a robust 1.52 MTs in September 2022.

Breaking down the numbers further, on a monthly basis, oil sales witnessed a 28 per cent month-on-month (MoM) drop, amounting to 1.41 MTs in August 2023.

The decline wasn’t limited to a single month; cumulatively, in the first quarter of the fiscal year 2024 (1QFY24), sales figures dwindled to 3.77 MTs.

This starkly contrasts with the 4.49 MTs reported in the same period of the previous fiscal year, indicating a substantial 16 per cent YoY decline.

Several factors contributed to this dramatic dip in oil sales. The surge in petroleum prices played a significant role, coupled with challenging macroeconomic conditions.

Additionally, a decrease in fuel oil (FO)-based power generation further added to the industry’s woes.

Specifically, the sales of Furnace Oil (FO), High-Speed Diesel (HSD), and Motor Spirit (MS) bore the brunt of this downward trend. FO sales plummeted by 72 per cent YoY, while HSD and MS sales dropped by 24 per cent and 18 per cent YoY, respectively.

On a monthly scale, the sales of FO, MS, and HSD experienced a 28 per cent, 23 per cent, and 28 per cent MoM decline, respectively.

Company-wise, Pakistan State Oil (PSO) saw a 34 per cent YoY reduction in sales. This was primarily due to a decline in MS, HSD, and FO sales by 13 per cent, 24 per cent, and a staggering 94 per cent YoY, respectively.

Other major players like APL, SHEL, and HASCOL also experienced declines in their sales by 13 per cent, 30 per cent, and 12 per cent YoY, respectively.

The first quarter of the fiscal year 2024 reflected these struggles. PSO, APL, and SHEL witnessed a drop of 19 per cent, 7 per cent, and 16 per cent YoY, respectively.

Read more: Govt announces plan to deport 1.1 million ‘illegal foreigners’

However, contrary to the trend, HASCOL marked a notable increase of 35 per cent YoY. This growth was attributed to a significant rise in sales of HSD and MS.

In terms of market share, PSO’s dominance in the market weakened slightly, declining by 2.8 per cent YoY to 50.5 per cent compared to 53.3 per cent in September 2022.

Conversely, SHEL and APL experienced marginal improvements in their market shares, rising by 0.68 per cent and 2.67 per cent YoY to 7.92 per cent and 11.88 per cent, respectively. Meanwhile, HASCOL’s market share remained relatively stable at 1.98 per cent in September 2023.

The declining trend in oil sales poses a challenge to Pakistan’s energy market, necessitating strategic measures to counter the adverse effects of this downturn.