Diesel sales fall on price fears, smuggled Iranian fuel

KARACHI: Demand for high speed diesel, the most widely used fuel in the country, has fell in February as consumers expect a sharp increase in prices amid a global rally, industry officials said on Friday.

"The price of high speed diesel (HSD) is expected to increase in the next review of petroleum prices so its consumption in the local market has fallen so far in the month of February," an industry official told The News.

"The global price of HSD has seen a constant increase and it is likely to be passed on to the local consumers."

The official said the price of HSD may go up by over Rs7 per litre in the next review as its price in the global market has surged substantially.

On the other hand, the local sale of HSD has recorded a decline and the sale numbers of the first week of the current month indicate that its consumption has registered a 19 percent fall in the first week of the current month compared to the same week of February in 2023.

The sale of HSD in the first week of the February stood at 98,000 tonnes compared to 80,000 tonnes in the same week of February of the last year.

The consumption of HSD also showed a decrease of 25 percent in the week under review compared to the same week in the month of January 2024. In the first week of January, the total consumption of HSD was 106,000 tonnes .

Industry officials said that diesel sale has dwindled as the Iranian smuggled diesel is still finding its way into the local market and the high price of Pakistani diesel is discouraging its local consumption.

"On the other hand, the sale of petrol also showed a decline of five percent in the first week of February compared to the same period in February of last year and it declined by 14 percent compared to the same week of January this year," another official said.

High price of petrol has resulted in its low consumption."

The sale of fuel oil also showed a massive decline of 59 percent so far in the month of February this year compared to the same period in February of last year and nosedived by 71 percent in the period compared to the same period of the last month of January this year.

The fuel oil consumption has dropped as the electricity generation from hydel and gas has improved in the recent days.