Fuel sales decline despite economic recovery

KARACHI: Despite some economic recovery, the sales of motor gasoline (MS) and high speed diesel (HSD) in Pakistan recorded a 4.0 per cent and 2.0 per cent decline, respectively, in the fiscal year ending June 30, 2024, compared to the previous year.

Officials in Pakistan’s oil sector told The News that although the government reported GDP growth improving to 2.38 per cent in FY24 from 0.29 per cent in FY23, this economic upswing did not translate into growth for the oil sector. Sales data indicates a continued decline, largely attributed to persistent smuggling of petrol and diesel across the western border.

“Smuggling of petrol and diesel remains a significant obstacle for the formal oil sector, despite government efforts and crackdowns,” the sources added. They highlighted that despite initial sales improvements following government actions against smuggling earlier in the fiscal year, sales sharply declined in September, with petrol and HSD sales dropping by 17 per cent and 22 per cent, respectively.

According to sales figures compiled by the oil sector, sales of petrol and HSD improved in the start of the last fiscal when the government launched a crackdown against smuggling, including dollars, diesel and other items. The sales of these two products registered substantial growth in these two months.

However, sales started declining in September of the last financial year, and the sales of petrol and HSD plunged by 17 per cent and 22 per cent, respectively. Surprisingly, during the tenure of the caretaker setup, which spanned almost six months, sales of these two products kept decreasing.

In March of the last financial year, sales of these two products showed some recovery as sales of petrol and HSD improved by 2.0 per cent and 15 per cent respectively.In May of FY24, sales of HSD improved by 17 per cent whereas sales of petrol were up by 7.0 per cent in June of the last financial year.

“These figures speak about the smuggling of petrol and diesel in the country, which can’t be stopped despite the efforts to stop it," the industry insiders said.