Pakistan Oil Sales Plunge by 40% in May 2023, Market Outlook Remains Depressed

Pakistan Oil Sales Plunge by 40% in May 2023, Market Outlook Remains Depressed

Karachi, June 2, 2023 – Pakistan’s oil sales in May 2023 witnessed a significant decline of 40% compared to the same period last year, amounting to 1.3 million tons.

However, there was an 11% month-on-month increase. The rise in sales on a monthly basis was mainly driven by an 18% increase in High Speed Diesel (HSD) and a 26% increase in Furnace Oil (FO). Motor Spirit (MS) also saw a 4% monthly increase, according to analysts at Topline Securities.

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HSD sales for May 2023 increased by 18% compared to the previous month, reaching 0.54 million tons. This can be attributed to factors such as the base effect due to the timing of Ramadan and Eid, the wheat harvest season, and lower month-on-month prices. FO sales also witnessed a significant increase of 26% to 91,000 tons due to higher demand for power generation.

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Total oil sales, excluding furnace oil, reached 1.2 million tons in May 2023, reflecting a 30% year-on-year decrease but a 10% month-on-month increase. For the 11-month period of FY23, oil sales, excluding FO, stood at 13.3 million tons, marking a 22% year-on-year decline.

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Among listed entities, Pakistan State Oil (PSO) recorded a 51% year-on-year decline in sales for May 2023, reaching 599,000 tons. This was primarily driven by lower sales of FO (-96% YoY) followed by HSD (-40% YoY). PSO’s market share decreased to 46% in May 2023, compared to 56% in May 2022. Shell Pakistan (SHEL) and Attock Petroleum (APL) also witnessed declines in sales, with decreases of 45% YoY and 42% YoY, respectively.

For the 11-month period of FY23, oil sales across all major petroleum products experienced a 26% year-on-year decline, totaling 15.3 million tons. The economic slowdown and higher inflationary environment, particularly impacting MS and HSD prices, have significantly affected demand. FO and HSD witnessed major drops with declines of 45% and 29% YoY, respectively, while MS sales declined by 18% YoY during the 11-month period.

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The outlook for oil sales in Pakistan remains depressed, as high inflation levels persist and the government is unable to provide relief in oil product prices. The economic challenges and market conditions continue to impact the demand for petroleum products.

Disclaimer: The information provided in this news report is based on official statistics and analyst insights. The figures are subject to change as new data becomes available, and the market conditions may vary.

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