Oil consumption in 2010 stands at fresh high of 20 million tons

The oil consumption in the country has increased to fresh high of 20 million tons in the year 2010, up 0.5 percent from 2009. This increase was mainly on the back of healthy demand in December 2010 when oil consumption improved by 11 percent on both yearly and monthly basis, analysts said.
However, in comparison to the 4 percent on year-on-year basis sales growth in the first half of 2010, demand contracted by 3 percent on year-on-year basis in the second half of 2010 mainly due to heavy floods in July and August 2010, Atif Zafar, an analyst at JS Global Capital said.
During the first half of FY11 (July-December 2010), PSO's volumes fell by 10 percent on year-on-year basis whereas, APL and Shell witnessed their sales improve by a respective 14 percent and 22 percent on year-on-year basis, largely due to addition in clientele (Nishat power plants for Shell), he added.
"We expect volumes to pick up on the half year basis during the second half of FY11 led by recovery in FO sales", he said adding hence, FY11 volumes should clock in at 20.4 million tons, at par with FY10's volumes. He pointed out that oil sales in December came in at 1.7 million tons, higher by 11 percent on both year-on-year and month-on-month basis. This growth was largely led by recovery in FO and HSD sales, which witnessed an improvement of 6 percent and 13 percent on year-on-year basis, respectively, Atif said.
He said that demand for Motor Gasoline (Mogas) maintained its rising trend on account of gas load shedding at CNG pumps (up 32 percent) while JP, SKO and LDO all witnessed pick up in sales during the month. As a result, oil consumption during 2010 stood at a fresh high of 20 million tons.
Despite the country's worst ever floods during July and August, the oil consumption declined by only 3 percent on year-on-year basis during the first half of FY11. The worst hits were HSD and FO volumes, due to hampered agricultural/ business activities and inundation of major power plants (92 percent of FO is used for power generation), respectively.
With PSO having the largest share in these segments, its overall sales witnessed a decline of 10 percent on year-on-year basis. However, APL and Shell's volumes improved during the period largely due to additions to their client base. PSO's share stood at 65 percent compared to APL's 6 percent and Shell's 15 percent during the period. "Expecting oil consumption to recover in the second half of FY11 post the floods, we anticipate volumes to arrive at 20.4 million tons during FY11, which would be one percent higher from last year", he said.