Oil sales slump to lowest since Covid lockdown as prices bite

KARACHI: Oil sector faced a steep decline in sales in September, as high prices and low demand for fuel oil hurt the industry, data from the Oil Companies Advisory Council showed on Tuesday

The sale of petroleum products fell 34 percent from a year earlier to 1.01 million tonnes, the lowest level since March 2020, when the country was under a lockdown due to the coronavirus pandemic.

The drop was mainly driven by a 72 percent plunge in fuel oil sales, which fell to 0.08 million tonnes as the country shifted to cheaper coal-based power generation.

Analysts said high prices of petroleum products, a slowdown in the economy, a fall in automobile sales, and a shift to coal-based power generation dampened demand.

Motor spirit (MS) sales fell 18 percent in September 2023 to 0.52 million tonnes. Similarly, high-speed diesel (HSD) dispatches plunged 24 percent year-on-year to 0.39 million tonnes in September 2023. On a month-on-month basis, petroleum sales declined 28 percent in September 2023, due to a jump in MS and HSD prices and a decline in fuel oil-based power generation. MS and HSD sales tumbled 23 percent and 28 percent month-on-month, respectively, while FO offtake dropped 28 percent month-on-month.

During the first quarter of this fiscal year, total petroleum sales declined 16 percent year-on-year to 3.77 million tonnes, compared to 4.49 million tonnes in the same period last year. Product-wise data showed reductions in all categories, with MS, HSD, and FO offtakes clocking in at 1.85 million tonnes, 1.44 million tonnes, and 0.35 million tonnes, respectively.

Company-wise breakup showed that Pakistan State Oil's (PSO) offtake declined 37 percent year-on-year in September 2023, due to a fall in sales of MS, HSD, and FO by 13 percent, 23 percent, and 94 percent, respectively. Similarly, HASCOL, APL, and Shell Pakistan Limited's (SHEL) dispatches slumped 12 percent, 13 percent, and 30 percent year-on-year, respectively. On a cumulative basis, petroleum sales of PSO, SHEL, and APL depleted by 19 percent, 16 percent, and 7 percent year-on-year, respectively, during the quarter under review. HASCOL's offtake, on the other hand, showed healthy growth of 35 percent year-on-year in the quarter.

During the first quarter of this fiscal year, PSO's market share dropped 1.7 percent to 50.8 percent, compared to 52.4 percent in the same period last year. SHEL's market share remained unchanged at 7.2 percent year-on-year. APL and HASCOL's market shares increased to 10.8 percent and 2.7 percent, respectively. The market share of other oil marketing companies (OMCs) remained stable at 28.5 percent in the quarter under review.