Oil sales down 6 percent in July 2023

KARACHI: Pakistan’s oil sales decreased 6 percent in the first month of the current fiscal compared to the same month of the last financial year on account of lower furnace oil (FO) sales for power generation.

On month-on-month basis, sales of petroleum products remained stable in July of this fiscal compared to the month of June last financial year. Higher prices of petroleum products as well as low off-take of FO by the power plants also contributed in the lower sales across the country during the month under review.

According to the sales number of petroleum products, total sales stood at 1.35 million tonnes in July 2023, depicting a dip of 6 percent year-on-year compared to 1.44 million tonnes in July of the last financial year.

On MoM basis, the sales of petroleum products remained stable compared to last June, when sales were 1.34 million tonnes. In product-wise sales, MS off-take went up 10 percent YoY to arrive at 0.66 million tonnes in July 2023.

Likewise, high speed diesel (HSD) volumes increased by 11 percent YoY to stand at 0.49 million tonnes in the month under review. FO sales volumes plunged by 59 percent YoY in July to settle at 0.14 million tonnes. Company wise sales of petroleum products showed that Pakistan State Oil (PSO) sales dropped by 10 percent followed by Attack Petroleum and Shell, which witnessed decline of seven percent each in July of this fiscal compared to last July.

It is worth mentioning OMCs sales fell by 27 percent in the last fiscal year on higher petroleum prices and an overall economic slowdown in the country. OMCs sales declined to 16.6 million tonnes in FY23, against 22.6 million tonnes recorded the year earlier.

The oil sales in FY23 is the lowest in last 17 years (excluding Covid year of FY20). In the fiscal year 2006, OMCs sales were recorded at 14.6 million tonnes. In FY23, OMCs witnessed a low demand on the back of higher prices of petroleum products and a slowdown in the economic activities.

Product wise, furnace oil and high speed diesel witnessed a major drop with a decline of 49 percent and 28 percent year-on-year respectively, while motor spirit sales declined by 17 percent YoY in FY23.

HSD and MS sales declined due to higher product prices in FY23, while FO declined on lower demand from power generation.

HSD sale price stood at an average of Rs255/liter in FY23 compared to average price of Rs145/liter in FY22 - an increase of 76 percent YoY.

On the other hand, MS sale price stood at an average of Rs245/liter in FY23 compared to average price of Rs148/liter in FY22 - an increase of 66 percent YoY.

OMC sales (excluding furnace oil) stood at 14.5 million tonnes in FY23, which is a decline of 22 percent YoY, and the lowest since FY15.