Monday May 20, 2024

Petroleum product sales hit 6-month low in April

By Tanveer Malik
May 03, 2024
Motorcyclists filling their fuel tanks at a petrol pump in Hyderabad, on March 1, 2022. — APP
Motorcyclists filling their fuel tanks at a petrol pump in Hyderabad, on March 1, 2022. — APP

KARACHI: Petroleum product sales fell 6 percent in April to a six-month lowas smuggling of Iranian products and lower electricity generation from furnace oil hurt demand, industry officials said on Thursday.

According to the figures of oil consumption in the country, the oil marketing companies posted sales of 1.1 million tonnes which mark a six months low and were down 4 percent against the sale of these products in the month of March and 6 percent down against the corresponding month of the last financial year.

During the first ten months (July-April) of this financial year, the oil sales plunged by 11 percent to 12.44 million tonnes against the same months of the last fiscal year.

According to the data, oil sales excluding furnace oil totaled 10.8 million tonnes, down by three percent in the month of April against the month of March this fiscal and two percent down against the April of last year.

During the first ten months of this fiscal, sales excluding FO clocked in at 11.57 million tonnes, down 4 percent yea-on-year.

The sale of petroleum products has been grappling with the tough conditions, created by the smuggling of Iranian products as the country’s refineries as well as oil marketing companies (OMCs) are bearing the brunt of this smuggling when their sales went down.

The situation has worsened when even one of the refineries had to shut down its operations due to huge stocks of high speed diesel (HSD), which have accumulated after its consumption dropped massively due to the supply of Iranian smuggled diesel.

The local oil sector has approached the authorities to crack down against the smuggled Iranian petroleum products particularly diesel, which has been threatening the financial sustainability of the sector as HSD is the main petroleum product, which is the mainstay of the oil sector in terms of the sale.

The sale of diesel couldn’t pick up even during the harvesting season in the country, which started in March and is still going in the upper parts of the country as the Iranian diesel was supplied to meet the needs of the harvesting season.

The refining sector warned the government to put an end to the smuggling of petroleum products to pave the way for the investment of 5-6 billion dollars in the upgrade of refineries to boost their production of petroleum products.