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KARACHI: Pakistan oil sales commenced FY23 with a decline of 26 percent on month-on-month basis to clock in at 1.44 million tons in July 2022. The oil sales in July 2022 are the lowest since February 2021.

This was mainly due to significant decline in all 3 petroleum products. High speed diesel (HSD) sales reduced by 38 percent on MoM to 444,000 tons, Motor Gasoline (MOGAS) sales declined by 15 percent on MoM to 594,000 tons and Furnace Oil (FO) sales dipped by 23 percent on MoM to 350,000 tons.

Major reasons behind the decline in oil sales are Eid holidays during the first half of July where inter provincial transportation activity subsided which led to low HSD sales, and monsoon season across the country resulted in lower traffic on the roads, Saad Ziker at Topline Securities said.

Furthermore, increase in MOGAS and HSD prices by 26 percent and 41 percent since June 2022 resulted in reduced demand of petroleum products and increase in usage of public transport and car pooling, he added.

As compared to last year, Pakistan oil sales recorded 26 percent on year-on-year decline in July 2022 which is owed to drop in MOGAS and HSD Sales by 27 percent on YoY and 38 percent on YoY, respectively. Excluding FO, oil sales were down 31 percent on YoY and 26 percent on MoM in July 2022 to 1.1 million tons.

Among the listed entities, Pakistan State Oil (PSO) sales posted 27 percent on MoM decline to 760,000 tons (lowest since February 2022), mainly due to decline in HSD sales by 38 percent on MoM. In terms of market share, PSO market share clocked in at 53 percent in July 2022 versus 52 percent in July 2021.

Other companies such as Attock Petroleum (APL) and Shell Pakistan (SHEL) also recorded drop of 29 percent on MoM and 37 percent on MoM to 142,000 tons and 100,000 tons, respectively.

“We expect oil sales to drop by 15-20 percent on YoY in FY23E, mainly due to low growth estimated in agriculture sector, likely decline in auto sales and increase in petroleum prices,” Saad Ziker said.

Copyright Business Recorder, 2022

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