Oil Marketing Companies (OMCs) managed to fortify their volumetric sales by 7 percent YoY to 20.04 million tons in FY14, as compared to 18.7 million tons in FY-13, according to a report released by Invest Cap. Oil Companies Advisory Committee (OCAC) has recently released the oil sales numbers of OMCs for the month of June 14. In FY14, OMCs managed to strengthen their volumetric sales by 7 percent YoY amid growth in three major oil products namely High Speed Diesel (HSD), Mogas and Furnace Oil (FO).
According to the report, the highest growth of 11 percent YoY to 9.4 million tons was witnessed in FO volume, as against 8.5 million tons recorded last year. A shift in electricity generation mix (tilted towards FO from Hydel and gas) pushed the FO sales higher during the period under review. Acute CNG loadshedding in most part of the country and longer than announced CNG shut down during winter in Punjab and KP pushed the Mogas volume by 7 percent YoY to 3.8 million tons. HSD volume inched up by a meager 3 percent YoY amid slower economic activity in the country.
However, analysis of monthly volume revealed an entirely opposite picture, whereas HSD sales dropped by 36 percent followed by Mogas and FO with a decline of 10 percent and 2 percent, respectively due to high base effect of May 2014 volume, the report said. Mogas sales by Pakistan State Oil (PSO) jumped by 10 percent YoY in FY14 to 1.9 million tons, as compared to 1.7 million tons in FY13. This volume growth led to a net increase of 2 percent in market share of the company to 49 percent. Despite FO volume growth of 7 percent YoY by the company, market share of the same product fell by 3 percent to 73 percent in FY14. Allegation against PSO of dealing in substandard HSD pushed its sales down by 6 percent to 3.7 million tons and hence the market shares of the product dropped by 6 percent to 53 percent. MoM volumes of all three products of the company witnessed a fall during June 14 with highest drop of 45 percent in HSD, it added.
Attock Petroleum Limited (APL), as per the report, registered double digits growth on YoY basis in volumes of all three major products during FY14. Mogas volume portrayed highest growth of 32 percent YoY followed by HSD and FO with YoY growth of 20 percent and 13 percent, respectively. However, on MoM basis only FO volume posted positive growth of 3 percent while HSD and Mogas sales plunged by 7 percent each.
During FY14, Shell volumes represented a mix trend with a growth of 8 percent YoY in Mogas while a fall of 2 percent in HSD volume. Although FO sales by Shell increased by mammoth 57 percent YoY but the company holds a meager 1 percent market share of the product. POL products sales by OMCs crossed 20 million tons benchmark after three years reflecting positives of the sector, the report added.
The prominent reason behind increase in OMCs sales can be attributed to higher electricity generation during the year amid extensive gas shortages that has pushed Mogas on higher side. Government's efforts to reduce electricity shortages would further boost furnace oil demand in FY15, whereby, higher transportation cost to limit High Speed Diesel (HSD) demand on lower side. "In the medium term, we anticipate OMS sales to go down as reliance on other alternative fuels to generate energy would gradually have their mark on FO sales," it said quoting market participants.
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