The oil marketing companies have been facing weaker oil sales over the last year. Monthly petroleum sales in the country in November 2023 fell by 11 percent year-on-year. The decline is attributable to the same recurring factors: higher petroleum prices relative to those in the previous year, the economic turmoil, and decline in the demand for furnace oil due to rising reliance on coal power plants. In November 2023, furnace oil sales were down by 40 percent year-on-year. Whereas, the motor gasoline and high-speed diesel sales were lower by 15 and 3 percent year-on-year.
However, it has been seen that due to falling petroleum product prices over the last couple of months, the volumetric sales by the OMC sector have witnessed a recovery on a month-on-month basis. Furnace oil sales have been finally up again on the month-on-month basis by 52 percent after falling consecutively in the past three months. The growth was due to lower base of primarily due to the absence of summer season and high-power demand for the fuel – the previous month and the rise in demand for FO due to shortage of RLNG or gas along with reduced hydel power generation in winter months. Motor gasoline volumes were surprisingly down by around 2 percent month-on-month despite the lower average price of petrol during the month. High-speed diesel volumes were up by 16 percent. The jump in HSD volumes was prices fall as well as the Rabi season.
That being said, the volumetric sales by the OMCs during the first 5 months of FY24 (5MFY24) were still down by almost 16 percent year-on-year. Going forward, the volumes are expected to recover during the rest of For FY24 as petroleum prices have come down; there is some expectation about a pickup in economic activity; interest rates are also expected to come down in second half of FY24, and the agriculture output is also expected to be promising this year.
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