HSD, petrol sale slump persists as high prices discourage consumers

KARACHI: Sales of high speed diesel (HSD) and motor gasoline have not picked up in recent weeks despite crackdown against smugglers of Iranian petroleum products, as high prices deter consumer spending, The News learnt on Monday.

Government initiated action against criminals over bringing in various types of contraband into the country, as it was harming the formal economy. This action also included crackdown against cross-border smuggling of Iranian petroleum products into Pakistan, which has been inflicting immense losses on the domestic oil sector.

According to the statistics provided by the oil sector to The News, the sale of both HSD and petrol has come down so far in the month of September this year. “Either the smuggling of these products is still being done clandestinely or the consumers have stopped buying of these products in huge quantities after prices went up to the highest level in the month of September,” oil sector people stated.

The sale of HSD in the first three weeks of September stood at 311,924 tonnes compared to 383,921 tonnes sold in the first three weeks of August this year. On the other hand, HSD sales in the first three weeks of September last year stood at 361,932 tonnes, this was higher by 50,008 tonnes compared to the current weeks this September.

Similarly, petrol sales stood at 470,000 tonnes in August, with sales in September standing at 409,000 tonnes so far, depicting a negative growth of almost 61,000 tonnes. In the corresponding period in September last fiscal, the sale of HSD was also on the higher side at 444,000 tonnes.

Sector people said that when the crackdown started against smuggled Iranian petroleum products, there was hope about visible growth in the consumption of petroleum products from the formal sector. However, the situation has not changed so far and the sector people are worried about the high prices of petroleum products, which are discouraging the consumers from utilising the diesel and petrol like they did in the past.

Pakistan is facing a loss of more than Rs60 billion annually due to smuggling of more than 2.81 billion litres of oil from Iran to Pakistan, according to media that quoted the contents of an intelligence report following the crackdown.

According to the report, as many as 995 petrol stations across the country are engaged in the sale of smuggled Iranian oil. Oil from Iran is smuggled in Iranian vehicles and comes to Pakistan. Iranian oil smuggling vehicles are called Zamyad, the report noted.