The sales of various oil products have increased by 9 percent on year-on-year basis to 9.1 million tons in the first half (July-December) of current fiscal year as compared to 8.3 million tons in the corresponding period of previous fiscal year.
According to Oil Companies Advisory Committee''s (OCAC) latest figures, local refined oil production has increased by 11 percent to 4.8 million tons in the period under review while total refined oil product imports surged by 5 percent to 4.1 million tons in this period.
Diesel (HSD) and furnace oil (FO), which constitute more than 83 percent of total oil sales, were up by 10 percent and 5 percent respectively during the said period.
"Diesel sales improved because of ongoing diesel rationing in Iran which has reduced infiltration of smuggled diesel into Pakistan," Farhan Mahmood an analyst at JS Global Capital Limited said. Frequent power failures also triggered demand for diesel by household generators and small captive plants. Likewise, stagnant hydro-power generation and rising gas shortage have increased FO demand. Moreover, petrol (MS) rationing in Iran also reduced its smuggling into Pakistan which has resulted in an increase in local petrol intake by dealers, hence improving petrol sales by 29 percent in the first half of FY08.
In the first half of current fiscal year, refined oil products imports reached 4.1 million tons versus 3.9 million tons in the first half of FY07, a growth of 5 percent on year-on-year basis. FO imports remained higher by 5 percent from 1.9 million tons to 2.0 million tons, whereas, diesel import went up by 5 percent from 1.9 million tons to 2.0 million tons during this period. Besides, 36,000 tons of Jet fuel was also imported during the period.
Amongst the listed Oil Marketing Companies (OMCs), PSO outperformed the industry by a wider margin. Against 9 percent growth in industry sales during first half of current fiscal year, PSO posted a healthy 13 percent growth in its volumetric sales over the same period of FY07. With 72 percent combined market share in FO and diesel, PSO outshined its rivals by posting volume growth of 12 percent and 13 percent in FO and diesel, respectively.
Against 7 percent year-on-year basis rise in overall oil sales during second quarter of FY08, Shell posted volume increase of 10 percent, while PSO and APL recorded a rise of 9 percent and 8 percent, respectively. In the second quarter, although flat growth was seen in FO, diesel and petrol sales were up by 12 percent and 31 percent, respectively.
Besides lower base affect due to penetration of smuggled products last year, volume growth in diesel was also due to increased diesel demand in the Khariff harvesting season which resulted in higher transportation. Similarly, petrol sales stood on a high side in Q2-FY08 owing to low gas pressures, which hampered CNG sales in extreme winters in Punjab.
In contrast, alone in December 2007, diesel sales declined by 12 percent as it stood at 555k tons versus 629k tons in December 2006. This decline in diesel sales is primarily due to extended Eid holidays and political unrest during the later part of December 2007.
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