KARACHI: Oil sales rose 9 percent month-on-month in November, boosted by lower petrol and diesel prices and higher demand for furnace oil due to gas shortages and lower hydropower generation, data from the oil marketing companies showed on Monday.
The country recorded sales of 1.4 million tonnes of petroleum products in November, up from 1.28 million tonness in October, according to the data. Excluding furnace oil, sales increased 7 percent month-on-month.
The monthly increase in sales was driven by lower fuel prices and a low base effect from October, when furnace oil sales were exceptionally low. The average petrol price in November was Rs282 per litre, down from Rs303 in October, while the average diesel price was Rs300, down from Rs311.
Furnace oil sales, which are mainly used for power generation, surged 54 percent month-on-month to 82,000 tonnes in November, as the country faced gas shortages and reduced hydropower output in the winter months.
However, furnace oil sales were still down 43 percent year-on-year, reflecting the government's policy to shift to cleaner and cheaper sources of energy.
On a year-on-year basis, oil sales declined 11 percent in November, as higher fuel prices and economic slowdown weighed on demand. Excluding furnace oil, sales were down 8 percent year-on-year. In the first five months of the current fiscal year, which started in July, total oil sales amounted to 6.5 million tonnes, down 16 percent from the same period last year, while ex-furnace oil sales were down 6 percent.
The average petrol price in the five-month period was Rs289 per litre, up 25 percent from a year ago, while the average diesel price was Rs295, up 21 percent. Among the oil marketing companies, Attock Petroleum saw its sales drop 9 percent year-on-year and 2 percent month-on-month to 121,000 tonnes in November, mainly due to lower furnace oil sales.
Pakistan State Oil, the largest oil marketing company in the country, recorded a 12 percent year-on-year and a 14 percent month-on-month increase in sales to 715,000 tonnes in November, as it benefited from higher furnace oil sales.
Shell Pakistan posted a 19 percent year-on-year and a 3 percent month-on-month rise in sales to 93,000 tonnes in November, with higher diesel and petrol sales.
Myesha Sohail, an analyst at Topline Securities, anticipated a potential recovery in ex-furnace oil sales in the coming months, as economic activity picks up and interest rates decline. "This is primarily attributed to a pickup in economic activity, where interest rates are expected to decline in the latter half of FY24, coupled with a favorable agricultural crop this year," she added.