Pakistan Petroleum Sales Hit 17-Year Low in FY23 Amid Economic Slowdown and Price Surge

Pakistan Petroleum Sales Hit 17-Year Low in FY23 Amid Economic Slowdown and Price Surge

Karachi, July 4, 2023 – Petroleum product sales in Pakistan have reached a 17-year low during the fiscal year 2022-23, according to recently released data on Tuesday. The decline in sales can be attributed to higher product prices and an overall economic slowdown, which have significantly impacted demand.

Analysts at Topline Securities noted that the sales of petroleum products dropped by 27 percent year-on-year (YoY) to 16.6 million tons during FY23. This marks the lowest sales figure for oil marketing companies (OMCs) since FY06, excluding the COVID-19-affected year of FY20 when sales were at their lowest. In FY06, OMC sales amounted to 14.6 million tons, as reported by the Pakistan Energy Yearbook.

Among the petroleum products, furnace oil (FO) and High-Speed Diesel (HSD) experienced the most significant declines, with a YoY drop of 49 percent and 28 percent, respectively. Additionally, Motor Spirit (MS) sales declined by 17 percent YoY in FY23.

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The surge in product prices was a major factor behind the decline in HSD and MS sales during FY23. The average sale price of HSD stood at Rs255 per liter, a 76 percent increase YoY compared to Rs145 per liter in FY22. Similarly, the average sale price of MS was Rs245 per liter in FY23, reflecting a 66 percent YoY increase from Rs148 per liter in FY22.

Excluding furnace oil, OMC sales in FY23 amounted to 14.5 million tons, marking a 22 percent YoY decline. This represents the lowest sales figure since FY15, excluding the COVID-19-affected year.

Pakistan State Oil (PSO), the leading market player, experienced a slight decline in market share during FY23, dropping from 51 percent in FY22 to 50 percent. This decline was mainly due to a sharp decrease in FO sales, which declined by 64 percent compared to the industry’s overall decline of 49 percent.

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Shell Pakistan (SHEL) held a market share of 7.6 percent, down from 7.7 percent in FY22, while Attock Petroleum (APL) maintained a market share of 9.6 percent, a slight increase from 9.3 percent in FY22.

In June 2023, Pakistan’s oil sales totaled 1.3 million tons, representing a 31 percent YoY decline but a 4 percent month-on-month (MoM) increase. This increase was primarily driven by a 7 percent MoM rise in MS sales and a 10 percent MoM increase in FO sales. HSD sales, however, remained unchanged.

During June 2023, MS sales increased by 7 percent MoM to reach 0.64 million tons. This increase was primarily influenced by seasonal factors such as holidays and summer vacations, as well as slightly lower MoM prices. FO sales increased by 10 percent MoM to 100,000 tons due to higher demand for power generation.

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Excluding furnace oil, total oil sales in June 2023 amounted to 1.2 million tons, representing a 16 percent YoY decline but a 3 percent MoM increase.

Among the listed entities, Pakistan State Oil (PSO) reported a 38 percent YoY decline in sales for June 2023, reaching 646,000 tons. This decline was primarily driven by reduced sales of FO (down 97 percent YoY) followed by HSD (down 22 percent YoY).

During June 2023, Shell Pakistan (SHEL) reported a 37 percent YoY decrease in sales, amounting to 95,000 tons. This decline was primarily driven by a 53 percent YoY drop in HSD sales and a 20 percent decline in MS sales. Similarly, Attock Petroleum (APL) experienced a 26 percent YoY decline in sales, reaching 150,000 tons. This decline was attributed to a 46 percent YoY drop in FO sales, a 21 percent decline in HSD sales, and a 7 percent decline in MS sales.

In terms of market share, Pakistan State Oil (PSO) held 48 percent in June 2023, down from 53 percent in June 2022 and 46 percent in May 2023. Shell Pakistan’s market share stood at 7.1 percent in June 2023, a decrease from 7.9 percent in June 2022 and 6.9 percent in May 2023. On the other hand, Attock Petroleum’s market share in June 2023 reached 11.2 percent, up from 10.4 percent in June 2022 and 9.5 percent in May 2023.

Looking at the fourth quarter of FY23, OMC sales amounted to 3.8 million tons. This figure represents a 1 percent increase quarter-on-quarter (QoQ) but a significant 40 percent decline compared to the fourth quarter of FY22.