POL consumption up 2.2pc in 1HFY12

KARACHI: The petroleum products consumption (ex non-energy products) in the country increased by 2.2 percent on year-on-year basis to 9.87 million tons in the first half of FY12 against 9.66 million tons recorded in the corresponding period in FY11.

This low growth in cumulative petroleum product volumes can primarily be attributed to decline in volumes almost across all the petroleum products (HSD, Kero, JP-1/JP-8, HOBC) while the same was offset thanks to FO and petrol (MS) pulling overall volumes growth into the positive territory, Khurram Schehzad, head of research at InvestCap said.

Local refineries' share deteriorated in the products' local-import mix, as 62 percent of the country's petroleum consumption demand was met through imports during the first half of FY12 (58 percent in December 2011) as compared to 60 percent in the first half of FY11 (56 percent in December 2010), he added.

He said that December 2011 had been depressing as far as petroleum consumption was concerned. The total consumption volumes stood at 1.45 million tons, (lowest since September 2011), posting a significant decline of 13.6 percent on month-on-month basis.

While most of the major petroleum products saw month-on-month decline in volumes during December 2011, HSD that contributes around 34 percent to the overall basket, recorded a massive drop of 29.9 percent on month-on-month basis, causing as much as 91 percent of the monthly decline in total volumes in December 2011, he said.

In addition, MS, another major product that shares about 15 percent of total consumption volumes, was down 11 percent on month-on-month basis sharing 12.3 percent in the monthly decline in overall consumption volumes.

"The monthly decline in volumes can be attributed to acute gas shortages (encouraging MS consumption in absence of CNG, resulting in MS growth of 17.5 percent on year-on-year basis), liquidity issues lingering across the energy chain making FO importers unable to provide product on time for consumption", he said and added that the HSD's volume was gravely affected amid winters with low transportation and agricultural activities observed in the country.

Against substantial decline in industry volumes in December 2011, PSO posted a lowest volume decline of 8.6 percent compared to other peers' thereby improving its overall market share by 373bps to 68 percent in December 2011 while the market share during the first half of FY12 stood at 61.8 percent, down 370bps, he said.

"On an already declining spree, Shell lost almost 1/3rd of its market share (238bps) in December 2011 to only 9 percent from 11.4 percent in November 2011, amid huge decline of 31.7 percent on month-on-month basis in volumes while its cumulative market share in the first half of FY12 stood at 10.2 percent, down 505bps," he added.

In December 2011, APL also brunt some of the declining industry volumes as the company saw a fat 25 percent month-on-month decline in its volumes, costing 112bps on its market share to 7.1 percent.

However, APL's cumulative performance in the first half of FY12 still stands superior to the industry peers as the company posted a massive volume growth of 35 percent on year-on-year basis compared to industry's only 2.2 percent during the first half of FY12, resulting in a market share of 8.2 percent, up 211bps on year-on-year basis.