Oil sales estimated to rebound 41pc in May

KARACHI: Oil sales are estimated to rebound 41 percent month-on-month to 1.5 million tons as transportation has resumed after ease in lockdown, a brokerage reported on Tuesday.

“Oil sales for May are likely to increase by 41 percent month-on-month on resumption of inter-city transport post the relaxations in lockdowns amidst COVID-19 outbreak,” analyst Fawad Bashir, analyst at Topline Research said.

However, lockdown adversely dented oil sales when compared with the corresponding month a year earlier. Oil sales fell 12 percent from 1.7 million tons in May last year.

The government decided to unlock economic activities after two months of shutdown in the wake of coronavirus outbreak.

Sales of high speed diesel are expected to improve 74 percent month-on-month, but were down three percent year-on-year to 688,000 tons.

There was demand from the transport and agriculture sectors due to wheat harvesting.

Sales of petrol are also expected to increase 14 percent month-on-month and rise five percent year-on-year to 637,000 tons.

Furnace oil volumes are also anticipated to improve 106 percent month-on-month to 145,000 tons due to low-base of last month and higher demand due to decline in prices. Furnace oil sales fell 51 percent year-on-year.

Pakistan State Oil’s sales are likely to increase the most by 58 percent month-on-month as high speed diesel segment is poised to post 128 percent growth.

Hascol volumes are likely to rise by 36 percent in May over April. The improvement is expected because of 50 percent increase in furnace oil volumes and an expected rise of 52 percent in high speed diesel sales.

Attock Petroleum and Shell volumes are also expected to improve 18 percent and three percent month-on-month, respectively during the month.

In 11MFY2020, oil sales are likely to drop 15 percent due to overall economic slowdown and increasing impact of COVID-19 outbreak.

Furnace oil sales are estimated at 1.8 million tons, down 39 percent as the government was phasing out its use for power generation. High speed diesel sales fell 14 percent to 5.8 million tons, while petrol sale dipped three percent to 6.6 million tons in the July-May period.

The economy was reeling under stabilisation measures before the virus crisis and its growth was expected to remain on the downward side compared to the previous years. But, the lockdown compounded the downside risks with 1.5 percent growth contraction expected in the current fiscal year.