Domestic fuel use down 11 percent

The country's oil consumption has declined by 11 per cent in March 2012 by comparison with the figures for the same period last year, analysts said on Tuesday. The decline was led by a fall in the sales of furnace oil (FO) and jet fuel, they said. Encouragingly though, consumption posted an impressive recovery of 18 percent on month-on-month basis.
The cumulative third quarter offtake stood at 2.8 million tons against 3.2 million tons during the preceding quarter, registering a decline of 10 per cent on quarter-on-quarter basis. "However, we contend a strong earnings outlook for marketing companies' in the third quarter on the back of hefty inventory gains and lower exchange losses," Atif Zafar, an analyst at JS Global Capital said.
He said that the oil consumption in March this year clocked in at 1.6 million tons, posting a decline of 11 percent on year-on-year basis. Lower sales are mainly attributed to a fall in consumption of FO, down 20 per cent, and JP, down 48 per cent, on the back of worsening of the circular debt situation and suspension of Nato supplies, respectively, he added. Nevertheless, motor gasoline (Mogas) sales volumes increased by 20 per cent on year-on-year basis to 239,000 tons because of enhanced CNG load shedding.
On a month-on-month basis, oil consumption posted an impressive recovery of 18 per cent. The improvement was said to have resulted as a result of seasonal uptake in volumes of FO and High-Speed Diesel (HSD). "While the third quarter has proved to be a lean quarter for oil consumption (down 10 per cent on quarter-on-quarter basis), we contend an improved earnings outlook for marketing companies for the quarter," he said.
"We believe hefty inventory gains (oil prices up 11 per cent) and lower exchange losses against the second quarter (PKR depreciation of 0.8 per cent in the third quarter against 2.8 per cent in the second quarter, to lead the improvement in the bottom line of the OMCs," he added. He was expecting PSO and APL to post an EPS of Rs 18, up 47 per cent and Rs 16.5, up two per cent on quarter-on-quarter basis.
The oil sales in the first nine months of FY12 stood at 14.3 million tons against 14.6 million tons in the same period last year, a decline of two per cent on year-on-year basis. "We maintain our full year forecast at 19.6 million tons, down one per cent on year-on-year basis," he said.