Aug oil sales up 6pc MoM due to low base effect

KARACHI: Pakistan oil sales in August 2022 witnessed increase of 6% on Month-on-Month (MoM) basis at 1.5 million tons after facing consecutive decline for the last 3-month.

Major reasons behind increase in oil sales includes low base due to lesser working days in July 2022 amid Eid-ul-Adha holidays. Despite a 6% MoM increase, oil sales remained lower than its last 6-month monthly average, Saad Ziker at Topline Securities said.

Motor Gasoline (MOGAS) and High Speed Diesel (HSD) sales were up by 7% MoM and 12% MoM to 638,000 tons and 496,000 tons, respectively. However, FO sales declined by 7% on MoM.

As compared to last year, Pakistan oil sales recorded 22% Year-on-Year (YoY) decline in August 2022 which is owed to double digit fall in all major petroleum products; MOGAS sales down by 26% YoY, HSD down by 26% YoY, and FO down by 35% YoY.

The YoY drop in oil sales is primarily due to rise in fuel prices, lower car sales, lower transportation activity and monsoon season/floods which resulted in reduced demand of petroleum products, Saad Ziker said.

Among the listed entities, Pakistan State Oil (PSO) sales posted increase of 4% on MoM while was down 23% on YoY to 791,000 tons. PSO market share remained same as last month at 52% versus 53% in same month last year.

Attock Petroleum (APL) and Shell Pakistan (SHEL) also recorded increase in oil sales by 8% on MoM and 10% on MoM to 154,000 tons and 110,000 tons, respectively.

During the first two months of FY22-23, oil sales are down by 24% on YoY to 2.97 million tons which is mainly led by overall slowdown in economy and higher fuel prices.

“We expect FY23 oil sales to drop by 20-25% YoY, mainly due to (i) lower growth in agriculture, (ii) decline in auto sales, and (iii) increase in petroleum prices.”

Copyright Business Recorder, 2022