In a concerning turn of economic events, Pakistan has witnessed an 11 percent year-on-year decrease in petroleum sales in the first ten months of fiscal year 2023-24, according to industry reports.
The total petroleum sales fell from 13.97 million tons in the July-April period of the previous year to 12.44 million tons during the same period in the current fiscal year.
This decline has been seen across several categories of petroleum products. Petrol sales dropped by 6 percent to 5.83 million tons, compared to 6.17 million tons last year. Even more dramatic was the decrease in furnace oil (FO) sales, which plunged by a staggering 53 percent to just 0.87 million tons. High-speed diesel (HSD) sales also fell slightly by 4 percent to 5.05 million tons.
The overall sales figures for April 2024 alone painted a similar picture, with a 6 percent year-on-year decline, amounting to 1.10 million tons of petroleum products sold. Analysts from Arif Habib Limited attribute this downward trend to several factors. The main causes identified include increased availability of smuggled petroleum products from neighboring Iran, a rise in the price of motor spirit (MS), and a reduced reliance on FO-based power generation.
April’s numbers further illustrate the ongoing challenges in the sector. Furnace oil sales in April saw a precipitous 59 percent year-on-year drop to 0.03 million tons. However, there was a slight 2 percent increase in HSD sales volumes, which reached 0.47 million tons, boosted somewhat by a reduction in HSD prices.
From a month-on-month perspective, April 2024 also witnessed a 4 percent decline in petroleum sales. Petrol sales saw a 7 percent month-on-month decrease, while FO dispatches fell by 33 percent. Conversely, HSD offtake experienced a slight increase of 2 percent.
On a company-specific level, Pakistan State Oil (PSO) experienced a 3 percent year-on-year decrease in dispatches for April 2024, driven by declines across its major product lines: MS, HSD, and FO dropped by 7 percent, 4 percent, and 22 percent, respectively. Other companies such as Shell (SHEL), Attock Petroleum Limited (APL), and Hascol also reported significant sales reductions of 7 percent, 18 percent, and 23 percent, respectively.
Year-to-date figures for 10MFY24 show similar trends, with PSO, Shell, and Attock Petroleum seeing year-on-year declines of 12 percent, 15 percent, and 5 percent, respectively, in petroleum sales. Contrastingly, Hascol reported a 5 percent increase. Market share dynamics also shifted, with PSO’s share dropping to 50.1 percent from 50.5 percent, Shell’s to 7.3 percent from 7.7 percent, while APL and Hascol saw increases in their market shares to 10.0 percent and 2.5 percent, respectively.
These sales dynamics underscore broader challenges within Pakistan’s energy sector, including the impact of economic conditions, market competition, and regulatory changes. Moving forward, stakeholders in the energy sector will need to navigate these challenges strategically to mitigate impacts and harness potential opportunities in the evolving market landscape.