Petroleum Sales Witness 8% Decline in August 2023

Petroleum Sales Witness 8% Decline in August 2023

Karachi, September 2, 2023 – Pakistan’s total petroleum sales for August 2023 reached 1.41 million tons, marking an 8 percent year-on-year (YoY) decline.

Analysts at Arif Habib Limited attributed the decline to a significant 64 percent YoY drop in furnace oil (FO) sales, driven by reduced reliance on FO-based power generation following the introduction of new local coal-based power plants.

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On the positive side, petrol and High Speed Diesel (HSD) sales experienced growth, with a 5 percent and 11 percent YoY increase, respectively, in August 2023. This growth can be attributed to the absence of heavy rainfall compared to the same period in the previous year.

Month-on-month (MoM), the petroleum sales sector recorded a 4 percent increase in August 2023. This growth is attributed to the fortnightly pricing trend during the month. Specifically, petrol sales increased by 2 percent MoM, reaching 0.67 million tons, while HSD off-take grew by 11 percent MoM, totaling 0.55 million tons. However, FO sales saw a substantial 18 percent MoM decline, reaching 0.12 million tons, primarily due to the aforementioned reduction in FO-based power generation.

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In the first two months of fiscal year 2023-24, total petroleum product sales decreased by 7 percent YoY, amounting to 2.76 million tons. A breakdown of product-wise data reveals an increase in sales volumes for petrol and HSD, while FO off-take experienced a significant decline. During the initial two months of the fiscal year, petrol, HSD, and FO sales stood at 1.33 million tons, 1.04 million tons, and 0.26 million tons, respectively.

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The shift away from furnace oil in favor of cleaner and more efficient energy sources is apparent in these figures, reflecting the country’s efforts to diversify its energy mix and reduce environmental impact. This trend is expected to continue as Pakistan seeks to modernize its energy infrastructure and meet growing power demands in a sustainable manner.