Petroleum consumption in the country has been shrinking with petroleum product sales depicting a massive decline of 46 percent year-on-year in April 2023. The decline in oil sales by the OMC sector has been going on for a while primarily due to higher petroleum prices; severe economic slowdown; weaker consumption of furnace oil in power generation; and continuous rise in smuggling from Iran.
The decline in petroleum sales in April 2023 for the OMCs was led by decline in furnace oil sales followed by high-speed diesel and motor spirit. Furnace oil posted a whopping decline of 84 percent for volumes sold year-on-year, while diesel volumes were down by a colossal 50 percent year-on-year. Motor spirit consumption was weaker by 25 percent year-on-year during the month. Besides the factors mentioned above, the decline in sales for OMC in April was also due to Ramzan and longer Eid holidays.
However, some respite for volumes came in month-on-month analysis; sales of petroleum products were up by 6 percent month-on-month primarily due to the harvesting season and resulting rise in HSD sales.
Diesel sales were up by 16 percent, and petrol sales were up by 4 percent month-on-month. However, sales where furnace oil was down 16 percent. Nonetheless, diesel sales continue to be weaker year-on-year by half in April, which is a clear indication of where the transportation and industrial activity stands in the country
The OCAC data shows that she overall decline in sales of petroleum products by the oil marketing companies in 10MFY23 was 24 percent year-on-year led by 41 percent in FO, 25 percent in diesel, and 16 percent in petrol, which goes on to show that the sales will likely continue to be weaker in FY23 with only two months remaining.
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