Pakistan petrol sales record high in July

Where notorious circular debt has weighed heavily on the operating environment of Oil Marketing Co. (OMCs), the gas curtailment is turning out to be a blessing in disguise for them. Therefore, where FO (Furnace oil) sales continues to remain suppress in July, MS (Motor Spirit) sales touched record high of 250k tons, up by a colossal 33.7% as compared to last year. Overall, country’s oil sales declined by 1.4% to 1.8mn tons in July 2011 as against 1.9mn tons in the same period last year. In addition to decline in the FO sales by 5.2%, the other major culprit was decline in HSD (High Speed Diesel) sales, down 5.9% from last year. Furthermore, country’s reliance on the imported sources remained high around 64% while only 34% was met through indigenous sources.

Company wise data show that, PSO (Pakistan State Oil) and SHEL (Shell Pakistan) sales declined by 9.5% and 18.7% on account of their exposure to FO and HSD markets, respectively. Contrary to industry trend, APL sales picked up by a massive 26% to 139k tons on account of higher weight-age of MS in its product mix.

The prevalent gas curtailment to CNG stations and overall power outages has turned out to be a blessing in disguise for the OMC sector as MS (petrol) sales continue to show startling performance. During the month of July, MS sales touched record high of 250k tons up by a massive 15.5% from the pervious high of 217k tons recorded in last month. The sales are a massive 33.4% up from last year sales, while product contribution in the sales mix has increased to 14% as against 10% in the same period last year.

According to industry sources, it is estimated that approx. 20% of the overall petrol demand is being driven by power shortage which has forced consumers to use petrol as a backup fuel for electricity generation.

FO sales continue to be adversely affected by the notorious circular debt. During the month of July, FO sales stood at 842k tons, down 5.2% as compared to 888k tons in the same period last year.

Moreover, on MoM basis, FO sales declined by 12.6% amid better hydel generation as heavy rains in northern parts rendered into higher water availability for power generation.

In addition to FO sales, HSD sales also remained subdued and stood at 625k tons in July, down 5.9% as compared to same period last year.

With higher exposure to FO business, PSO sales continue to be negatively affectively affected by the circular debt. Company’s FO sales declined by 11.4%, rendering into overall sales decline of 9.5%. While Shell, the other listed firm, showed volumetric decline of 18.7%, sales of APL improved by massive 26% primarily on account of better petrol sales.