KARACHI: Overall petroleum products sales declined 32 percent to 1.65 million tons in October 2018, primarily because of shifting of power generation from furnace oil (FO) to RLNG and coal-based generation resulting in lower demand of FO, as per latest petroleum sales data issued on Tuesday.
Analyst Arslan Hanif at Arif Habib Limited said various factors were responsible for the decline. “There are various factors that led to the sales decline, including increase in prices of motor spirit and high speed diesel (HSD) dampening fuel demand, advent of smuggled fuel from Iran, and its expanding footprint from northern region to southern region, and shifting of power generation from FO to RLNG and coal-based generation resulting in 72 percent lower demand of FO.”
Motor spirit sales depicted a flattish trend on yearly basis, as volumes clocked-in at 0.62 million tons, down by 8.0 percent on monthly basis. Similarly, HSD sales plummeted 14 percent YoY, while moving up by 1.0 percent MoM to 0.72 million tons.
Also Read: IMF: economic policies
Meanwhile, FO sales witnessed a steep decline of 72 percent YoY and 19 percent MoM to 0.25 million tons. “We believe that this decline may be more evident in the winter season due to lower electricity demand,” Hanif added.
During the first four months of the currenct fiscal year, FO and HSD sales witnessed a steep decline of 68 percent and 17 percent, to 1.10 million tons and 2.55 million tons, respectively. Currently, total available stock of FO in the country is around 346,000 tons.
Company-wise analysis demonstrates that it has been difficult for PSO to retain its market share as diminishing demand of FO dragged overall market share down to 44 percent in October from 57 percent in the same month last year.
Despite operating more than 3,500 retail outlets, company’s retail volumes settled at 1.95 million tons during four months, down 21 percent compared to 2.48 million tons in the same period last year.
On the other hand, total market share of Attock Petroleum (APL) and Shell increased to 10 percent and 8.1 percent in October 2018 largely fuelled by growth in sales of motor spirit. HASCOL maintained its market share at 11.1 percent.
(This news/article originally appeared in The News on November 7th, 2018)