Karachi, December 4, 2023 – Pakistan has witnessed a significant upswing in oil sales, marking a 9 percent Month-on-Month (MoM) increase in November 2023. The surge in sales is attributed to the declining prices in the petroleum market.
The Oil Marketing Companies (OMCs) in Pakistan reported a total sales volume of 1.4 million tons, reflecting a robust 9 percent MoM growth. Moreover, Ex-Furnace Oil (FO) sales exhibited a notable 7 percent MoM increase during the same period. Analysts at Topline Securities pointed out that this surge can be attributed to the reduced prices of Petrol and Diesel, along with a comparatively lower base of FO sales in the previous month.
The average Petrol price in November 2023 saw a decline to Rs282 per liter from Rs303 per liter in October 2023. Similarly, the average Diesel prices decreased to Rs300 per liter in November 2023 from Rs311 per liter in the previous month.
In a surprising twist, FO sales for November 2023 experienced a substantial 54 percent MoM increase, totaling 82,000 tons. Analysts suggest that the spike is linked to the shortage of Re-Gasified Liquefied Natural Gas (RLNG) and Gas, coupled with reduced hydel power generation during the winter months. This led to a notable shift towards FO-based power generation.
However, on a Year-on-Year (YoY) basis, the overall OMC sales for November 2023 witnessed an 11 percent decline, with Ex-FO sales dropping by 8 percent. This downturn is attributed to elevated fuel prices and the prevailing economic slowdown.
The cumulative sales for the first five months of the fiscal year 2023-24 stand at 6.5 million tons, marking a significant 16 percent YoY decrease. Ex-FO sales, during the same period, were down by 6 percent compared to 7.7 million tons in the corresponding period of the previous fiscal year.
Highlighting the broader market trends, average Petrol prices for the first five months of FY24 stood at Rs289 per liter, reflecting a substantial 25 percent YoY increase. Similarly, average Diesel prices surged by 21 percent YoY, reaching Rs295 per liter during the same period.
Among the listed entities, Attock Petroleum (APL) reported sales of 121,000 tons in November 2023, marking a 9 percent YoY decline and a 2 percent MoM decrease. A significant drop in FO sales, down by 43 percent YoY, played a pivotal role in APL’s overall decline.
Pakistan State Oil (PSO) reported a 12 percent YoY decline in sales for November 2023, but witnessed a 14 percent MoM rise, totaling 715,000 tons. The surge in FO sales by 337 percent MoM contributed substantially to PSO’s overall sales.
Shell Pakistan (SHEL) faced a 19 percent YoY fall in sales for November 2023 but managed a 3 percent MoM rise, reaching 93,000 tons. High-Speed Diesel (HSD) sales increased by 7 percent MoM, and Motor Spirit (MS) sales saw a 1 percent MoM uptick during the same period.
Looking ahead to the fiscal year 2023-24, analysts anticipate a potential recovery in Ex-FO OMC sales, projecting an estimated increase of up to 5 percent. This optimistic outlook is primarily rooted in expectations of increased economic activity, a decline in interest rates in the latter half of the fiscal year, and favorable agricultural crop conditions.