Oil sales by the oil marketing companies in November 2020 continued to grow for all the three key petroleum products for a second month: furnace oil, high speed diesel, and motor gasoline. The increase in November volumes stood 21 percent higher year-on-year, where the growth was led by high speed diesel at 29 percent year-on-year, but motor gasoline and furnace oil also didn’t stay too far behind rising by 18 an 20 percent, respectively.
As per the data by OCAC, November also marked the highest monthly HSD sales since May 2018. The the phenomenal growth in diesel volumes was due to two reasons. First, the restriction on the border during COVID have helped control the smuggling of diesel especially across the Iranian border. This has given rise to local diesel sales by theoil marketing companies.And second is the recovery seen in the economy after covid restrictions were lifted.
Motor gasoline also continued its elevated trend, while The furnace oil that has been witnessing a slide on a monthly basis in the last two months due to the onset of winter season, has continued to move upwards on a year-on-year basis.
FO has made inroads into leading the overall petroleum consumption once again. 5MFY21 aggregates show that total OMC sales increased by 11 percent year-on-year where furnace oil witnessed the highest increase of 31 percent, followed by 13 and 8 percent increase in diesel and motor gasoline.
Rising petroleum demand in the country is a good omen as it shows recovery in growth and economic activity post COVID-19 first wave restrictions and lockdowns. However, slowdown in December cannot be ruled out as the second wave of the virus is gaining momentum. OMCs should not exclude a decline in demand if cases continue to rise staggeringly.
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