The overall petroleum products sales declined by 27 percent on year-on-year basis during the fiscal year 2019 due to economic slowdown and significant increase in petroleum prices after rupee devaluation. Excluding Furnace Oil (FO) sales, volumes declined by 13 percent on year-on-year basis, highest attrition in more than a decade. Furnace oil sales continued its declining trend; down by 59 percent owing to change in the country's generation mix to relatively cheaper fuels (namely RLNG/Coal).
Product wise, HSD volumes contracted by 20 percent to 7.2 million tons in this period due to its smuggling from Iran region and a slowdown in economic activities, mainly transport. MS oil sales during FY19 remained flattish at 7.4 million tons against last 10-year (FY09-18) CAGR of 18 percent. Muted sales in the MS segment could be attributed to the declining purchasing power of consumers amidst inflation and increase in petrol prices by 30 percent in the last year.
During June 2019, petroleum sales fell 29 percent on the back of a 57 percent decline in FO sales and 24 percent decline in HSD sales. Company wise, Hascol remained top underperformer during FY19 as the company lost 3.5ppts and 2.4ppts year-on-year market share in MS and HSD respectively. Pakistan State Oil (PSO) lost 2-2.4 percent market share in MS/HSD. GO outperformed peers by gaining 3ppts market share in each HSD and MS. Key risks to the sector include further slowdown in the economy, increase in turnover tax and currency depreciation, an analyst at Topline Securities said.
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