ISLAMABAD
The oil sales in the country reached 2.2 million tonnes in April 2022, the highest level since May 2018, on the back of healthy economic activities and increased demand from independent power producers (IPPs).
According to Topline Securities, oil sales have climbed by 32 percent on a year-on-year (YoY) basis, owing to a 161 percent YoY growth in furnace oil (FO) sales and a 17 percent YoY increase in high-speed diesel (HSD) sales.
This takes total sales during the first 10 months (July-April) of the current fiscal year 2021-22 to 18.48 million tonnes, up by 17 percent on a year-on-year basis.
Petroleum product sales surged significantly on a month-over-month basis, owing to increasing agricultural activity and high demand in the power sector. Petroleum goods consumption climbed by 21% on a year-on-year basis, owing to a 33 percent increase in HSD and a 62% increase in FO.
Petroleum sales climbed by double digits in the first ten months of the current fiscal year (10MFY22) due to increasing sales of the three primary items. During that time, MS climbed by 11% to 7.4 million tonnes, HSD increased by 19% to 7.3 million tonnes, and FO increased by 26% to 3.1 million tonnes. Economic recovery and increased transportation activity drove the double-digit rise in these months.
Without the FO sales in April, overall sales were 1.8 million tonnes, up 17 percent year over year and 14 percent month over month. PSO’s sales increased by 58 percent year on year, reaching a four-year record of 1.4 million tonnes. Sales increased by 314 percent year over year in FO and 40 percent year over year in HSD. PSO’s market share climbed from 47 percent in April of last year to 56 percent in April of this year.
Shell Pakistan Limited (SHEL) had a 16 percent increase in sales to 156,000 tonnes, while Attock Premium Limited (APL) saw a 28 percent increase in sales to 173,000 tonnes.
Topline Securities expects oil sales to continue, but the rising circular debt and Price Differential Claim (PDC) continue to be a major threat to the sector.
The report believes that higher car/bike sales and rising oil prices will continue to drive oil marketing companies’ (OMCs) sales and profitability of the sector; however, increasing circular debt and rising price differential claim (PDC) remain key risks for the sector.
