KARACHI: Pakistan domestic oil sales have dropped by 14 per cent in Month on Month (MoM) in December 2022 due to overall slowdown in the economy.
Analysts at Topline Securities Limited said that Pakistan oil sales in December 2022 decreased by 14 per cent MoM to 1.34 million tons mainly due to 1) seasonal trend of slowdown in December, 2) lower demand of furnace oil (FO) for power generation, and 3) overall slowdown in the economy.
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This is the lowest monthly sales number since first COVID lockdown period of February – April 2020. FO/High Speed Diesel (HSD)/Motor Spirit – Petrol (MS) declined by 10, 22 and 8 per cent MoM, respectively.
Oil sales recorded 11 per cent YoY decline in December 2022 due to fall in all major petroleum products; MS down 11 per cent YoY, HSD down 15 per cent YoY, and FO down 3 per cent YoY.
The YoY drop in oil sales is primarily due to 1) higher fuel prices, 2) overall reduction in economic activity and 3) lower FO based power generation.
Among the listed entities, Pakistan State Oil (PSO) posted a decrease of 23 per cent MoM and 9 per cent YoY to 626k tons. PSO’s market share slightly improved to 47 per cent in December 2022 compared to 46 per cent in December 2021.
Attock Petroleum (APL) sales declined 9 per cent MoM and 16 per cent YoY. While, Shell Pakistan (SHEL) sales decreased by 4 per cent MoM and by 18 per cent YoY.
APL and SHEL market share for Dec-2022 was 9 per cent and 8 per cent respectively compared to 10 per cent and 9 per cent share in December 2021.
During first half of the current fiscal year, oil sales are down 19 per cent YoY to 9.03 million tons due to economic slowdown with decline visible in all major petroleum products. Higher prices of MS and HSD have also had a major impact on demand.
Product wise FO and HSD have witnessed the most major drop with a decline of 24 per cent and 23 per cent YoY respectively, while MS sales declined by 15 per cent YoY in 1HFY23.
The analysts said FY23 oil sales to drop by 20 per cent YoY, mainly due to overall slowdown in the economy. Local prices are set to remain elevated due to lower government fiscal space, which would continue to dent demand.
