Oil sales drop 5pc2 min read

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KARACHI: The country’s total oil sales dropped by five per cent to 24.593 million tonnes in 2017-18 from 25.948m tonnes in 2016-17 due to 27 per cent fall in furnace oil sales.

This 5pc decline in sales growth is after a lag of five years when the industry posted a fall of four per cent in FY12.

Furnace oil (FO) sales dropped to 7m tonnes in 2017-18 from 9.614m tonnes owing to reduced demand from power sector during the year, figures of the Oil Companies Advisory Council (OCAC) said.

The government had imposed a ban on usage of expensive furnace oil for power generation during winters due to high cost of generation and availability of RLNG. Later on, the usage of FO resumed post commencement of summer when demand generally picks up. However, utilisation level remained on the lower side.

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Sale of high speed diesel (HSD) and petrol surged by 6pc and 11pc to 9m tonnes and 7.396m tonnes versus 8.537m tonnes and 6.675m tonnes in 2016-17.

It is worth noting that car sale have been going brisk despite rising petrol prices and three time rise in car prices. Petrol demand may rise as more new entrants (Chinese, Korean and European) are coming up for local assembly in the next one to two years.

Besides, two-wheeler sales have also been going strong especially of Atlas Honda Limited (AHL) which achieved a record sale of 1.058m units in July-May 2017-18 as compared to 888,640 units in same period last fiscal. Total two- and three-wheeler sales rose to 1.744m units in the last 11 months of current fiscal year from 1.501m units in corresponding period last fiscal.

As per the figures of Pakistan Automotive Manufacturers Association (Pama), truck sales are going strong as against depressed sales of buses. Truck sale soared to 8,507 units in July-May 2017-2018 from 6,854 units in same period last fiscal while bus sale plunged to 687 units from 1,053 units.

According to Umair Naseer of Top Line Securities, petrol and diesel prices had risen by 35-40pc in FY18 on back of higher international oil prices.

He said total oil sales in June 2018 were down 12pc year-on-year (YoY) and 25pc month-on-month (MoM).

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FO sales last month stood at 645,000 tonnes showing 24pc drop on YoY and 27pc fall in MoM.

HSD sales in June 2018 stood at 589,000 tonnes which is down 9pc and 35pc YoY and MoM respectively. Petrol saleswere recorded in 614,000 tonnes last month (up 9pc YoY and down 6pc MoM).

Syeda Humaira Akhtar at BMA Capital said the overall industry sale volume may continue to decline in the upcoming year (22.4m tonnes expected for FY19, reflecting a drop of 9pc YoY) mainly due to drop in black oil volumes (44pc YoY drop expected as cheaper coal and LNG replace FO-based power generation).

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