Pakistan’s petroleum sales have slumped 35-month low in March 2023 owing to slowdown in overall economic activity.
Pakistan oil sales in March 2023 decreased by 9 per cent MoM to 1.11 million tons mainly due to: lower demand of furnace oil (FO) for power generation; and slowdown in overall economic activity due to Ramadan effect, said analysts at Topline Securities.
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This is the lowest monthly sales number in 35 months, since February-April 2020. FO/ High Speed Diesel (HSD) declined by 28/17 per cent MoM respectively. Motor Spirit (MS) slightly increased by 1 per cent MoM.
Oil sales recorded 39 per cent YoY decline in March 2023 due to fall in all major petroleum products; MS down 28 per cent YoY, HSD down 43 per cent YoY, and FO down 70 per cent YoY.
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Among the listed entities, Pakistan State Oil (PSO) posted a decrease of 10 per cent MoM and 44 per cent YoY to 536k tons. PSO’s market share decreased to 49 per cent in March 2023 compared to 52 per cent in March 2022.
Attock Petroleum (APL) sales declined 1 per cent MoM and 30 per cent YoY. While, Shell Pakistan (SHEL) sales decreased by 15 per cent MoM and by 38 per cent YoY. APL and SHEL market share for March 2023 was 10 per cent and 8 per cent respectively compared to 9 per cent and 8 per cent share in March 2022.
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During nine months (July – March) 2022-2023, oil sales are down 21 per cent YoY to 12.8 million tons due to economic slowdown with decline visible in all major petroleum products. Higher inflationary environment, particularly the prices of MS and HSD have had a major impact on demand.
Product wise FO and HSD have witnessed major drop with a decline of 33 per cent and 25 per cent YoY respectively, while MS sales declined by 16 per cent YoY in 9MFY23.
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The analysts expect FY23 oil sales to drop by 20-25 per cent YoY, mainly due to overall slowdown in the economy. Demand will continue to remain muted due to elevated inflation levels and inability of government to provide any relief in oil product prices.
