Pakistan’s oil sales started FY27 on a strong footing. Petroleum product sales reached 1.51 million tons in July 2026, increasing by 23 percent year-on-year and 20 percent from June. More importantly, sales excluding furnace oil rose by 18 percent to 1.43 million tons—the highest July volume since 2021.
Petrol sales increased by 19 percent year-on-year and 12 percent month-on-month, with volumes highest since June-22.
The improvement came despite retail prices remaining considerably higher than last year, suggesting that demand is gradually recovering after several years of compression. The rebound in automobile sales, increased movement of goods and people, and lower prices compared to June all supported petrol consumption.
High-speed diesel sales performed even better, rising by 23 percent year-on-year and 25 percent month-on-month. Diesel demand is usually a stronger indicator of activity across agriculture, transport, construction and industry.
Improved farm economics and agricultural activity contributed to the monthly increase, while a gradual recovery in the broader economy also supported commercial transport demand.
However, the headline growth must be viewed in context. Better border controls and reduced availability of smuggled Iranian fuel pushed some demand back towards the documented market. Shortages of solvents and lubricants used for fuel adulteration also encouraged consumers to return to formal retail channels. Part of the increase, therefore, represents a shift from informal to recorded sales rather than an equivalent rise in the country’s total fuel consumption.
Furnace oil sales reached more than five times the exceptionally low level recorded in July last year and nearly double June sales. The increase was largely associated with higher electricity demand during the summer.
Yet furnace oil remains a relatively small and volatile part of overall petroleum consumption, and its sharp percentage growth comes from a very low base.
The outlook for OMC sales is cautiously positive. Sector volumes are expected to grow by around 8–10 percent during FY27, supported by improving economic activity, recovering automobile demand, better agricultural output and continued enforcement against smuggled fuel.
The low base of the previous years should also help headline growth.
But sustaining July’s pace will be difficult. Retail prices are likely to remain elevated and volatile due to geopolitical tensions and fluctuations in international oil prices.
Even if global prices ease, the government has limited room to pass on the full benefit. It has budgeted Rs1.68 trillion in petroleum levy collections for FY27, making fuel taxation an important part of the fiscal framework. Lower international prices may therefore be offset by a higher levy.
July is an encouraging start, but it does not yet signal a return to rapid or uninterrupted growth. Formal fuel sales should continue to recover, though the pace will depend on economic activity, pump prices and the government’s ability to prevent smuggled fuel from returning to the market.