Petroleum sales dip 4pc to 5.38 million tons in July-September

KARACHI: Sales of petroleum products in Pakistan dipped four percent to 5.38 million tons in the first three months of the current 2015/16 fiscal year as subdued demand of furnace oil and high speed diesel canceled out the low price-triggered growth in gasoline sales.
Oil marketing companies’ (OMC) data showed on Tuesday that the cumulative sale volumes stood at 5.61 million tons in July-September 2014/15.
“FO prices have been on a declining trend. But, the demand remained sluggish, falling by 20 percent in the quarter (ended September 2015) as OMCs were reluctant to sell FO to power sector due to persisting delayed payments from them,” said Shahbaz Ashraf at Arif Habib Limited.
Further, power plants are also meeting their fuel supply needs through liquefied natural gas.
Ashraf said motor spirit (MS) sales grew 42 percent because of lower fuel prices, while sales of furnace oil (FO) and high speed diesel (HSD) dropped 20 percent and five percent, respectively in July-September 2015.
Analysts expect strong appetite for petrol throughout the year. The government is frequently raising taxes on POL products to jack up its revenues to meet this fiscal year’s budgetary targets.
Analysts said a cut in the prices of petroleum products as a result of drop in global crude rates or government slashing taxed may lead to increased demand.
The OMC’s data revealed that oil sales depicted a three percent growth in September, clocking in at 1.86 million tons compared to 1.81 million tons in August.
The stock analyst said the increase can be attributed to nine percent increase in MS, coupled with 5.0 percent increase in HSD sales. FO volumes fell 3.0 percent during the month.
There was a massive increase in MS sales to 0.5 million tons in September 2015.
“The limited availability of CNG, along with low POL (petroleum, oil and lubricants) products prices, and robust passenger car demand led by Corolla were key factors for the increase,” Ashraf said.
Pakistan State Oil accounted for 57.88 percent of total sales in the quarter, down from 58.09 percent a year ago.
Similarly, Attock Petroleum Limited’s market share also contracted during the period, down 145bps to 9.82 percent, while HASCOL’s sales gained in July-September, with market share up 108bps to 6.5 percent.