Karachi, February 1, 2024 – The petroleum industry in Pakistan has witnessed a significant downturn as sales of petroleum products dropped by 13 percent during the first seven months (July-January) of fiscal year 2023-24.
According to data released by analysts at Arif Habib Limited, various factors including higher petroleum product prices and a slowdown in the economy have contributed to the decline.
The overall sales of petroleum products fell to 9.07 million tons during the first seven months of the current fiscal year, compared to 10.47 million tons in the corresponding period of the previous fiscal year. The breakdown of specific products reveals a 7 percent decline in petrol sales, which reached 4.18 million tons during July-January 2023-24, compared to 4.48 million tons in the same period of the last fiscal year.
High-speed diesel sales also recorded a 7 percent decline, totaling 3.67 million tons during the period under review, compared with 3.95 million tons in the corresponding period of the last fiscal year. The most significant drop was seen in the sale of furnace oil (FO), which plummeted by 53 percent to 0.75 million tons during the first seven months of the current fiscal year, compared to 1.59 million tons in the same period of the previous fiscal year.
Analysts at Arif Habib Limited attribute the reduction in petroleum sales to both higher prices of petroleum products and a general economic slowdown. The petroleum dispatches for January 2024 were reported at 1.38 million tons, indicating a 4 percent year-on-year decline. During the same period, motor spirit (MS) sales dropped by 5 percent, while high-speed diesel (HSD) sales volumes decreased by 12 percent year-on-year.
On a month-on-month basis, however, petroleum sales saw a 12 percent growth in January 2024. This growth is attributed to the reduction in the price of MS and HSD, as well as the increased demand for FO-based power generation due to a decline in hydel power generation in peak winter.
Company-wise analysis reveals that the sales of Pakistan State Oil (PSO) plummeted by 7 percent year-on-year in January 2024. This decline is primarily attributed to a decrease in the sales of MS and HSD by 11 percent and 13 percent, respectively, while FO dispatches displayed a surge of 2 times year-on-year. Other key players, including Shell (SHEL) and Hascol, witnessed a decline of 15 percent and 11 percent year-on-year, respectively. At the same time, Attock Petroleum Limited (APL) posted a growth of 9 percent year-on-year in January 2024.
Looking at the cumulative sales during 7MFY24, APL, PSO, and SHEL experienced declines of 4 percent, 16 percent, and 19 percent year-on-year, respectively. On the other hand, Hascol’s offtake witnessed a growth of 21 percent year-on-year during the same period.
Market share dynamics also saw changes during 7MFY24, with PSO’s market share dropping by 1.3 percent to 49.7 percent, compared to 51.1 percent in 7MFY23. SHEL’s market share dropped by 0.5 percent, arriving at 7.1 percent year-on-year in 7MFY24. Meanwhile, the market share of APL and Hascol increased to 10.3 percent (from 9.3 percent in SPLY) and 2.5 percent (from 1.8 percent in SPLY), respectively. Other oil marketing companies maintained a stable market share at 30.4 percent in 7MFY24.
