The industrialists and producers of electricity in the energy-starved Pakistan began replacing the costly furnace oil (FO) fuel with the imported Liquefied Natural Gas (LNG). Hence, the sale of motor gasoline (MOGAS) and high speed diesel (HSD) grew by 12 and 6 percent respectively during April and the sale of Furnace oil declined by 24 percent.
The analysts at Topline Research said on Friday that furnace oil sales remained under pressure and as a result total oil sales of the country declined five percent YoY to two million tons. In 10 months of the fiscal year 2016, oil sales registered growth of 4% led by MOGAS and HSD sales which were up 25% and 4% respectively. The sale of furnace oil decreased 6% during the month under review.
"Sales of MOGAS and HSD have remained strong due to sharp fall in petroleum product prices thus increasing consumer purchasing power," said Topline analyst Umair Naseer. MOGAS and HSD prices both came down by 13 percent that was Rs 64 and Rs 73 per liter respectively in April. Furnace oil sales came under pressure due to what the analyst said "availability of the LNG to power plants and industrial sector". With expanding countrywide network, Hascol Petroleum's (HASCOL) sales showed strong growth of 67 percent YoY to 142000 tons with market share improving to 7% in Apr 2016 versus 4% in April last year. Sales of Pakistan State Oil (PSO), country's largest oil marketing company, came down by 8% YoY to 1.1 million tons driven by lower furnace oil sales.
In future, the analyst said the oil marketing companies (OMCs) were likely to benefit from increasing sales volume of MOGAS and HSD as margins on these items were fixed in rupee terms in contrast to the furnace oil. "We believe sales from LNG have compensated for declining Furnace oil sales in case of PSO," the analyst said.
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