Petrol sales touch record high in July

The motor spirit (petrol) sales in the country have touched record high of 250,000 tons in July, up by 33.7 percent as compared to the same month last year. "Where notorious circular debt has weighed heavily on the operating environment of oil marketing companies (OMCs), the gas curtailment is turning out to be a blessing in disguise for them", analysts said.
Therefore, where furnace oil (FO) sales continue to remain suppress, motor spirit (MS) sales touched record high in July, they added. The overall country's oil sales declined by 1.4 percent to 1.8 million tons in July 2011 as against 1.9 million tons in the same period last year. In addition to decline in the FO sales by 5.2 percent, the other major culprit was decline in high speed diesel (HSD) sales, down 5.9 percent from last year.
"The country's reliance on the imported sources remained high around 64 percent while only 34 percent was met through indigenous sources," Nauman Khan, an analyst at Topline Securities said. The company data show that, Pakistan State Oil (PSO) and Shell Pakistan (Shell) sales declined by 9.5 percent and 18.7 percent on account of their exposure to FO and HSD markets, respectively. Contrary to industry trend, APL sales picked up by a massive 26 percent to 139,000 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, Nauman said. During the month of July, MS sales touched record high of 250,000 tons up by a massive 15.5 percent from the pervious high of 217,000 tons recorded in last month. The sales are a massive 33.4 percent up from last year sales, while product contribution in the sales mix has increased to 14 percent as against 10 percent in the same period last year.
According to industry sources, it is estimated that approximately 20 percent 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. The FO sales continue to be adversely affected by the notorious circular debt. During the month of July, FO sales stood at 842,000 tons, down 5.2 percent as compared to 888,000 tons in the same period last year.
Moreover, on MoM basis, FO sales declined by 12.6 percent 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 625,000 tons in July, down 5.9 percent as compared to same period last year.
With higher exposure to FO business, PSO sales continue to be negatively affected by the circular debt. The company's FO sales declined by 11.4 percent, rendering into overall sales decline of 9.5 percent. While Shell, the other listed firm, showed volumetric decline of 18.7 percent, sales of APL improved by massive 26 percent primarily on account of better petrol sales.