The oil and gas marketing sector has been in the news lately for some relevant positive and negative reasons: Declining international oil prices, a decrease in local prices, and the OMC margins increase and the rising circular debt levels.
Amid all that has been happening, some assumptions about key petroleum products like a rise in petrol and a shrink in furnace oil are safe to make with the full throttle winter season just around the corner.
Major petroleum sales that include HSD, furnace oil and motor gasoline (petrol) increased by four percent in 4MFY15 compared to first four months of FY14. On individual basis, motor gasoline has witnessed the largest increased in the first four months of FY15, posting a 10 percent rise year on year. While diesel grew by around six percent in 4MFY15, furnace oil volumetric sales remained stagnant. Motor gasoline also witnessed the largest rise in October 2014; the 30 percent year on year and 13 percent month on month jump in petrol sales is attributable to the ongoing CNG curtailment.
A trend opposite to FY14 consumption is that taken by the furnace oil.
Not only has this petroleum product been on a downward trajectory since the beginning of this fiscal year, it has also been depressed in year on year sales comparison; in October FY15, furnace oil sales by the oil marketing companies dropped by eight percent year on year.
In the months to come, production would be tilted towards petrol; refineries would be gushing petrol as the winter season is expected to bring higher gas shortages. And while power generation is tilted towards furnace oil, lower demand in winters and rising circular debt will restrict furnace oil sales by the OMCs.
Comments
Comments are closed.