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  • Pakistan petroleum sales slump by 24% in 2MFY23

    Pakistan petroleum sales slump by 24% in 2MFY23

    KARACHI: Petroleum sales in Pakistan registered 24 per cent decline during first two months (July – August) 2022/2023, according to data released by Oil Companies Advisory Council (OCAC).

    According to details, the sales of all petroleum products fell to 2.96 million tons during first two months of the current fiscal year as compared with 3.90 million tons in the corresponding months of the last fiscal year.

    READ MORE: Pakistan high petroleum prices massively cut oil sales in July

    Produc-wise data showed a decline in all categories; offtake of petrol, high speed diesel (HSD) and furnace oil (FO) settled at 1.23 million tons, 0.94 million tons and 0.68 million tons, respectively.

    Total Petroleum sales settled at 1.53 million tons in August 2022, witnessing a decrease of 22 per cent YoY.

    Analysts at Arif Habib Limited attributed the fall to: heavy rainfall across the country leading to floods; lower furnace oil-based power generation; and massive surge in petroleum prices.

    READ MORE: Domestic oil sales grow by 14% in 8MFY22

    Hence, MS reported a drop of 13 per cent YoY arriving at 0.64 million tons in August 2022. Similarly, High Speed Diesel (HSD) volumes decreased by 26 per cent YoY clocking in at 0.50 million in August 2022.

    Whereas, Furnace Oil (FO) sales volumes plummeted by 35 per cent YoY in August 2022, reaching 0.33 million tons. Meanwhile, petroleum offtake climbed up by 6 per cent MoM, amid a reduction in MS and HSD prices compared to July 2022. As a result, MS and HSD volumes showed a jump of 7 per cent and 12 per cent MoM, respectively. However, FO sales recorded a fall of 7 per cent MoM in August 2022.

    READ MORE: Domestic oil sales surge by 18% in 5MFY22

    Company-wise analysis shows that PSO registered a drop of 23 per cent YoY in August 2022 which was majorly contributed by plunge in sales of MS, HSD and FO by 13 per cent, 29 per cent and 36 per cent YoY, respectively.

    Similarly, sales of APL and SHEL also plummeted by 23 per cent and 19 per cent YoY, respectively. Meanwhile, HASCOL’s offtake surged by 78 per cent YoY amid massive jump in MS and HSD volumes.

    READ MORE: Pakistan cuts petroleum prices amid Russia-Ukraine War

    During 2MFY23, market share of PSO, SHEL and HASCOL remained unchanged at 52 per cent, 7 per cent and 2 per cent YoY, respectively. Whereas, market share of APL improved by 1 per cent YoY to 10 per cent (9 per cent in 2MFY22). Meanwhile, market share of other OMCs declined to 29 per cent in 2MFY23 from 30 per cent in same period last year.

  • OCAC suggests fortnightly POL prices revision

    OCAC suggests fortnightly POL prices revision

    KARACHI: The Oil Companies Advisory Committee (OCAC) has advised the government to review petroleum prices on fortnightly basis instead monthly basis.

    In a letter to Secretary Petroleum, the OCAC said that due to the declining petroleum products prices experienced in February and March 2020, the whole downstream oil industry was facing uncertainty and financial exposure.

    “As a consequence, upliftment from refineries and Oil Market Companies (OMCs) depots is depressed when there is also a huge trading exposure in imports,” it said, adding that needless to mention, the losses incurred and being incurred by oil industry due to fluctuation of Pak Rupee/ US Dollar parity is also over and above the pricing exposure.

    “In light of above to mitigate the situation in weeks and months ahead so as to avoid any undesirable situation in terms of imports shyness and availability of petroleum products, we proposes to switch the frequency of petroleum products pricing from monthly to fortnightly basis and if further needed to weekly basis.”

    It is pertinent to mention that fortnightly prices have also been successfully implemented in the past, the OCAC said.

    Recently, analysts at Topline Securities revised down earning forecast for Oil and Gas exploration companies over FY20E-22F by 18-33 percent due to: downward revision in international oil price assumption; incorporation of lower-than-expected 1HFY20 results; and likely delays in production from few fields mainly for MARI.

    The Energy Information Administration (EIA) has downward revised their oil price forecast by 33 percent and 13 percent to US$43 and US$55/bbl for 2020E and 2021F, respectively in the aftermath of deadlock over production cuts between OPEC and allied countries (mainly Russia). Saudi Arabia announced price discounts and production increase to 12.3mn bopd (current 9.8mn bopd) from Apr 2020 onwards.

    To note, crude oil prices (Arab Light) are down 46 percent to US$37/bbl since Dec 31, 2019.

    Concerns over epidemic Corona Virus Disease (COVID) is also weighing down on the global growth outlook and subsequently on oil demand. OPEC in its recent Mar 2020 report (released on Mar 11) has revised down World GDP growth target to 2.4 percent vs. earlier 3.0 percent for 2020.