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Motor gasoline demand seen rising 5-6pc in next five year: OCAC

By Tanveer Malik
May 16, 2024
A fuel station worker refills a cars petrol tank. — AFP/File
A fuel station worker refills a car's petrol tank. — AFP/File

KARACHI: The country's motor gasoline demand is poised to grow 5-6 percent in the next five years, driven by improved economic indicators and a surge in automobile sales, industry projections showed.

The country's gasoline consumption is projected to reach 9.4 million tonnes by the end of fiscal year 2027-28, up from 7.7 million tonnes in the current fiscal year, the Oil Companies Advisory Council's (OCAC) the Pakistan Oil Report stated.

High-speed diesel demand is also expected to rise, albeit at a slower pace, growing 1-3 percent in the next five years.The demand projection for motor gasoline is based on improved economic indicators, whereas the demand for high-speed diesel is expected to normalize based on the government’s initiative to curb cross-border movement of petroleum products in order to secure the domestic petroleum market.

The report said consumption of motor gasoline and high-speed diesel fell significantly in the current and last fiscal year compared to FY2021-22, mainly due to smuggled petroleum products

The sale of motor gasoline totaled at 7.4 million tonnes in the fiscal year ended on June 30, 2023, which is expected to close on the slightly higher side by the end of this fiscal year.

Although the motor gasoline projections are based on improved economic indicators, the challenges that will continue to persist include the lack of a mass transit system and the country’s slow transition to alternate fuels.

“In the next five years, the demand for motor gasoline will normalize with a growth rate of 5-6 percent, driven by improvements in inter/intra-city transportation and increase in production and sales of automobiles,” the report said.

It projected high-speed diesel's sales to settle at 6.4 tonnes by the end of this fiscal year compared to 6.3 tonnes in the previous financial year. High-speed diesel demand has been projected at 7.0 tonnes by the end of financial year 2027-28.

According to the report, the demand for furnace oil will not see any significant growth and is projected to remain flat in the coming years. The last fiscal year witnessed 2.59 tonnes of furnace oil, which is expected to remain 2.6 tonnes by the end of this financial year whereas it has been projected to remain the same in the next five years.

The report noted that furnace oil demand forecast is limited because of local minimum refinery production due to higher availability and consumption of RLNG in the sector. The outlook indicates that the product will continue to be exported owing to low domestic demand.The report projected a one percent growth in the demand for JP-1 in the next five years whereas it also projected a one percent growth in the demand for JP-8 (Defence).