OMC sector hopes to become charmful

With the political dust considerably settled and the PML-N government-elect to take charge in a weeks time, some hints on the direction make it easier to suggest good times ahead for the oil marketing sector.
Like the rest of the oil and gas industry, the OMC sector, plagued with circular debt, has been wistfully waiting to be saved from this mess. Coming of the new government has inflated some hope into the sectors fading charms.
First, if the new political set-up is to go by its word, the forthcoming fiscal year is allegedly a year of transformation and reforms. And with energy crisis hitting its zenith, the resolution of the named crisis will be the governments main concern.
A few worth recalling measures that are likely to impact the oil marketing companies positively, since they are the key suppliers of fuel to the generating companies, are the increase in power tariffs, removal of subsidies and reducing power theft.
Besides directly impacting the oil marketing companies, the proclaimed reforms and structural changes will also result in increased economic growth, which will indirectly increase petroleum product consumption in the country.
Recently, the demand for petroleum products has been facing mixed trends; where petrol consumption has picked up significantly during the ongoing year (FY13) on account of the CNG curtailment, high speed diesel (HSD) sales have dwindled on poor economic activity in the country. Analysts believe that the promised reforms will bode well for the petrol and HSD sales, and hence the OMC profit margins.
Also, another green signal for the oil marketing companies is PML-Ns plans about getting the power plants going in the initial phase regardless of the fuel mix. And with no immediate fix to the power crisis but the furnace oil, such plans are a clear indication of increased furnace oil being burned for power generation.
Furthermore, with global forecast keeping a lid over oil prices, an increase in volumetric growth will compensate for the former. Not only that, the sectors growth plans from horizontal expansion to vertical integration would further spice things up.
Though the new political set-up will have no option but pursue its promises, wait for a year to find out which way the cookie crumbles!