POL products sale up 8pc in January

KARACHI: Petrol sales continued to rise in January on improving numbers of automobiles, mainly fuelling growth in sale of petroleum, lubricant and oil (POL) products in the country during the past month, a brokerage reported on Monday. 

Taurus Securities Limited, citing the latest statistics of Oil Companies Advisory Council, said retail sale of motor spirit (MS) rose 27 percent to 548,000 tonnes in January over the same month a year ago. The MS sale was also up two percent in January over December 2016. 

High speed diesel (HSD) followed suit. The retail fuel sale increased 10 percent year-on-year (YoY), but it decreased seven percent month-on-month (MoM) to 645,000 tonnes in January 2017 over the previous month. Overall, POL sales rose eight percent YoY and fell two percent MoM to 2.05 million tonnes in January. 

“We believe that avenues exist for further demand growth in retail fuels segment as maintenance works on highways and motorways near completion,” said Daniyal Kanani, an analyst at Taurus Securities Limited. “Additionally, cheaper MS as compared with compressed natural gas would further favour its consumption.”

The government’s decision to pass on the increase in international oil prices to consumers is expected to constrict sales. In January, prices of MS and HSD were increased Rs1.77 and two rupees per litre, respectively.    But, the price uptrend can also be reversed as the government has opened entry gate to new players through deregulating fuel prices, which would obviously turn the market competitive. 

Oil and Gas Regulatory Authority issued 21 entry licences to oil and marketing companies and four others for the development of POL storages and terminals across the country. 

In January, furnace oil sale was recorded at 771,000 tonnes, down two percent YoY.    

Sales of MS and HSD, in the first seven months of the current fiscal year, increased 21 percent to 3.854 million tonnes and 16 percent to 4.850 million tonnes, respectively. Furnace oil sale rose 16 percent to 5.665 million tonnes in the July-January period of 2016/17. 

Pakistan State Oil (PSO) started seeing its grip on the retail fuels market loosening due to growing competition. It saw a share cut in retail fuels market to 40.2 percent in January from 42.4 percent in December 2016.

PSO’s receivables from power sector shot up to Rs241 billion.

However, the oil marketing company maintained its leadership with 54.8 percent of market share and recorded 12 percent growth in sales of its products in January. 

Hascol led the pack in terms of retail fuels sale in the month under review.  The company registered 51 percent YoY increase in MS and 22 percent in HSD sale during January.