Despite an 8% year-on-year (YoY) increase in sales of Motor Spirit (MS-Petrol) and an 11% YoY expansion in sales of High-Speed Diesel (HSD), the Oil Marketing Companies (OMC) sector in Pakistan saw a notable 7% YoY contraction in sales volume of Petroleum, Oil, and Lubricants (POL) products during the first two months of the fiscal year 2023-24 (2MFY24).

This drop in the OMC sector’s sales volume can be attributed to several factors. Firstly, there was a significant 61% YoY decline in Furnace Oil (FO) sales, primarily due to the substitution of FO with cheaper alternatives and lower power demand as a result of an economic slowdown. This economic slowdown was brought about by unprecedented monetary tightening and fiscal consolidation measures, high domestic POL prices following the devaluation of the Pakistani Rupee (PKR), and the imposition of the maximum Petroleum Development Levy (PDL).

On a month-on-month (MoM) basis, the sales volume of the OMC sector, MS-Petrol, and HSD experienced slight improvements in August 2023, with MS sales up 4% YoY and HSD sales up 2% YoY. This improvement coincided with an uptick in economic activity following the removal of import restrictions imposed by the Government of Pakistan (GoP) to comply with the conditions of the IMF Stand-By Arrangement.

According to the Oil Companies Advisory Committee (OCAC) oil sales data for August 2023, the aggregate sales volume of POL products during the first two months of FY24 amounted to 2.76 million metric tons, marking a 7% YoY decrease compared to the 2.97 million metric tons in the same period in the previous fiscal year. In particular, Furnace Oil (FO) sales volume dropped significantly by 61% YoY to 262,000 metric tons due to the shift away from FO in power generation and reduced power demand due to a subdued Large Scale Manufacturing (LSM) activity amidst the economic slowdown. In contrast, MS and HSD sales volumes improved, with 8% YoY and 11% YoY increases, respectively, in 2MFY23 compared to the same period in the previous year.

Pakistan State Oil (PSO) saw its market share rebound to 52% in August 2023 after dropping to 50% in July and 48% in June. The company’s total sales volume increased by 7% MoM to 726,000 metric tons in August, supported by an 11% MoM increase in HSD sales and a 6% MoM increase in MS sales. However, PSO’s FO sales contracted by 27% MoM in the same period. On a cumulative basis, PSO’s sales volumes declined by 10% YoY in 2MFY24, primarily due to an 84% YoY contraction in FO sales. Meanwhile, sales volumes of PSO’s MS and HSD increased by 18% YoY and 25% YoY, respectively, in 2MFY24.

In August 2023, Attock Petroleum Limited (APL) experienced a 14% MoM improvement in sales volume, reaching 150,000 metric tons, in line with the broader sector. This increase was driven by a 22% MoM rise in HSD sales and a 17% MoM increase in FO sales. However, on a cumulative basis, APL’s sales volumes decreased by 5% YoY in 2MFY23 to 282,000 metric tons, with FO sales declining by 30% YoY while MS and HSD sales increased by 8% YoY and 7% YoY, respectively.

Shell Pakistan Limited (SHEL) maintained its 7% market share in August 2023, with its sales volume declining by 7% YoY to 195,000 metric tons in 2MFY24, with both MS and HSD sales also down by 8% YoY. However, on a MoM basis, SHEL’s sales volume improved by 4% to 97,900 metric tons in August.

During the first two months of FY23, Hascol Petroleum Limited (HASCOL) saw a significant 60% YoY increase in sales volume, reaching 78,900 metric tons, up from 49,200 metric tons in the same period in the previous year. This growth was driven by 61% YoY and 60% YoY increases in MS and HSD sales, respectively. However, HASCOL’s total sales volume narrowed by 19% MoM, reaching 35,400 metric tons in August 2023, primarily due to a 63% MoM decline in HSD sales volume to 7,200 metric tons.

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