The oil consumption in the country has increased by 17.6 percent to 11.116 million tons in the first eight months of FY07 as compared to 9.452 million tons in the same period last fiscal. According to figures available here the consumption of MS stood at 738,000 tons in the first half of FY07 as compared to 788,000 tons in the same period in FY06, down by 6.3 percent.
Kerosene consumption stood at 141,000 tons against 152,000 tons, down by 7.5 percent. JP-1 consumption was 694,000 tons against 754,000 tons, down by 3.1 percent and HSD consumption declined by 3.1 percent to 4,643,000 tones against 4,793,000 tons. On the other hand LDO consumption increased by 20.4 percent in the first eight months of FY07 to 98,000 tons against 82,000 tons in the same period in FY06. Fuel Oil 4,663,000 tons against 2,786,000, increased by 67.4 percent. The consumption of other oil products increased by 43.7 percent to 140,000 tons in the first eight months of FY07 against 97,000 tons in the same period in FY06.
Khurram Schehzad, an analyst at Invest Capital Securities said that Black Oil demand has been continuing its upward march with a stunning 66 percent growth on year-on-year basis. FO consumption has increased due to galloping electricity demand (rising by more than 10 percent per annum).
LDO demand rose due to improved agricultural activities observed in Rabi season. Conversely, the demand for White oil products (MS, HSD, JP-1-8, HOBC and Kero) continued their decline of 3 percent on year-on-year basis in the first eight months in FY07.
Continuous decline in HSD and Mogas is attributed to muddy rains and continuous penetration of alternates like CNG and LPG. Also, the smuggled Iranian cheaper Mogas in Balochistan/South region has also tarnished local Mogas consumption.
JP-1's decline has been aggravated due to sealing of Islamabad airport (in recent past) and change in flights schedules. JP's exports were also halted due to documentation anomalies at Afghanistan's border.
February-07 volume maintains 18.9 percent growth YoY: During February 2007, the overall petroleum products' volume stood at 1.31 million tons against 1.10 million tons recorded in February 2006. Consumption of Black Oil (up 66 percent) in February 2006 has driven the uninterrupted growth.
PSO recorded a 66 percent market share in the eight months of FY07, down from 70 percent observed in seven months of FY07. APL has also shown a shave-off in its market share to 4.2 percent in the eight months of FY07. Shell's market share settled at 14 percent.
Soaring electricity demand (with gas shortages to power plants) and inadequate water reserves coupled with Parco's shutdown would keep FO demand in the high range in the coming months as well. This trend would likely continue until gas supplies by way of imports or local discoveries are restored. In contrast, the demand for major white oil products' like Mogas and HSD would continue to decline amidst alternate fuel's presence, Khurram Schehzad added.
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