Petroleum sales expected to reach 17.1m tonnes this year: report

KARACHI: The sale of petroleum products in Pakistan is projected to reach 17.1 million tonnes by the end of the current financial year, up from 16.8 million tonnes, driven by increased economic activity, according to the latest Pakistan Oil Report.

The report also forecasts that demand for petroleum products will rise to nearly 19 million tonnes over the next five years (FY2028-29), with steady annual increases. Compiled by the Oil Companies Advisory Council (OCAC), the report indicates that sales of all petroleum products, except kerosene oil, are expected to grow by the end of the fiscal year.

Petrol sales are expected to reach 7.3 million tonnes, up from 7.1 million tonnes in the previous fiscal year. The report attributes this growth to improved economic indicators, including economic stability, a stable exchange rate, potential improvements in transport infrastructure and population growth.

However, the report also highlights challenges that may affect petrol sales, such as unresolved issues related to the pending brownfield refinery policy, environmental constraints and a lack of policies supporting the transition to alternative fuel sources.

High-speed diesel (HSD) sales are also projected to grow, reaching 6.4 million tonnes by the end of the fiscal year, compared to 6.2 million tonnes in the previous year. The report states that international lenders estimate Pakistan’s GDP growth at 2.8 per cent for FY2024-25, reflecting the broader macroeconomic outlook. It also notes that HSD demand is expected to grow by 2-3 per cent annually over the next five years, driven by potential expansion in logistics, supply chain activities and industrial operations. However, policies promoting solar-powered agricultural tube wells and the persistence of illicit trade through illegal fuel outlets could significantly impact

HSD demand. The report projects a 1-2 per cent increase in JP-1 sales and a 1.0 per cent rise in JP-8 sales (used for defence purposes), contingent on favourable pricing policies.

Regarding light diesel oil, the report states that demand depends on its availability from local refineries, a factor that also applies to kerosene oil demand. For furnace oil (FO), the report indicates that its demand is largely tied to refinery production due to high availability and exports resulting from weak domestic demand. In FY2023-24, 54 per cent of locally produced FO was sold domestically, while 46 per cent was exported.