Pakistan Witnesses 15% Plunge in Petroleum Sales in 1HFY24

Pakistan Witnesses 15% Plunge in Petroleum Sales in 1HFY24

Karachi, January 2, 2024 – Pakistan has reported a significant 15% decline in petroleum sales during the first half (July – December) of the fiscal year 2023-24.

The petroleum sales figure stood at 7.68 million tons for this period, down from 9.03 million tons in the corresponding half of the previous fiscal year.

Product-wise Breakdown:

• Petrol: 3.57 million tons

• High-Speed Diesel (HSD): 3.1 million tons

• Furnace Oil (FO): 0.56 million tons

The data highlights a reduction in all categories, pointing towards a broader economic slowdown. December 2023 alone saw a 7% Year-on-Year (YoY) decline in total petroleum sales, registering at 1.24 million tons.

Analysts from Arif Habib Limited have identified multiple factors contributing to this downturn:

1. Surge in Petroleum Prices: The increase in the prices of petroleum products has likely impacted consumer demand.

2. Economic Slowdown: The overall economic slowdown has led to reduced industrial activity and subsequently lower demand for petroleum products.

3. Shift in Energy Sources: The lower demand for Furnace Oil (FO) can be attributed to the reliance on new coal-based power plants, affecting the overall balance of the petroleum market.

December 2023 Breakdown:

• Petrol Sales: Dropped by 8% YoY, totaling 0.57 million tons.

• HSD Sales: Decreased by 2% YoY, reaching 0.51 million tons.

• FO Sales: Plunged by 36% YoY to 0.08 million tons.

On a Month-on-Month (MoM) basis, petroleum sales reported a 10% decline in December 2023. While Motor Spirit (MS) sales remained unchanged at 0.57 million tons, HSD dispatches plummeted by 21% MoM due to peak demand in November 2023 for the Rabi season. Additionally, FO offtake declined by 4% MoM in December 2023.

Company-wise Analysis:

• PSO (Pakistan State Oil): Sales dropped by 5% YoY in December 2023, driven by reduced sales of MS, HSD, and FO by 4%, 8%, and 11%, respectively.

• SHEL (Shell): Witnessed a YoY drop of 18%.

• APL (Attock Petroleum Limited) and HASCOL: Showcased a YoY sales growth of 6% each.

Market Share Dynamics:

• During 1HFY24, PSO’s market share dropped by 1.3%, standing at 50.1%, while SHEL’s market share dropped by 0.4% to 7.1% YoY.

• APL and HASCOL saw an increase in market share to 10.1% and 2.6%, respectively, during 1HFY24.

• Other Oil Marketing Companies (OMCs) maintained a stable market share at 30.01% in 1HFY24.

Despite these challenges, HASCOL’s offtake witnessed a notable growth of 27% YoY in 1HFY24. As Pakistan navigates through economic fluctuations, stakeholders in the petroleum industry remain vigilant, adapting strategies to the evolving market conditions.