Oil consumption in the local market has declined by six percent on year-on-year basis in November 2010 as compared to the same period last year. On month-on-month basis, it declined by 19 percent in November 2010 than the previous month. "The decline in oil consumption in the local market was primarily led by an eight percent on year-on-year and 33 percent on month-on-month fall in furnace oil (FO) sales", Atif Zafar, an analyst at JS Global Capital said.
Coupled with fewer working days in November, abnormally high sales in the preceding month caused the sequential decline, he added. He further said PSO and APL sales declined by a respective 22 percent and 24 percent on month-on-month basis, whereas Shell's volumes were three percent lower than last month's. On the contrary, APL and Shell volumes increased by a respective 8 percent and 18 percent on year-on-year basis. Zafar added that both these OMCs benefited from higher FO sales to new clients. PSO's loss of sales (down 11 percent YoY) has been the most when compared to others, largely due to it being the fuel supplier to flood inundated power plants.
During the first five months of FY11, local oil consumption stood at 8.1 million tons, down five percent on year-on-year basis primarily due to a sharp fall in sales during August and September, courtesy the floods. "We expect overall volumes to pick up in the months to follow, led by recovery in FO sales, and arrive at 20.4 million tons (up 1 percent year-on-year) for FY11", he concluded.
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