Petroleum demand has been coming down as a result of rising prices, a depreciating currency, and economic hardships in the country that have resulted in lower productivity, lower automobile sales, lower FO-based power generation and weaker and economic activity. Petroleum consumption continues to decline in March 2023, with sales by oil marketing companies falling by 39 percent year on year. This is the lowest monthly sales number in 35 months, since COVID times in Feb-Apr 2020. The decline in petroleum sales for the OMCs was led by decline in furnace oil sales followed by high speed diesel and motor spirit. Furnace oil posted a whopping decline of 70 percent for volumes sold in Mar-23 year-on-year, while diesel volumes were down by a colossal 43 percent year-on-year. Motor spirit consumption was weaker by 28 percent year-on-year.
The month-on-month sales also show a decline in OMC sales where furnace oil was down 27 percent year on-year; HSD lower by 17.4 percent year-on-year; while the motor spirit was flat with one percent year-on-year growth. The decline month-on-month was due toa jump in petroleum prices; an increase in smuggled petroleum products from Iran; and heavy rainfall in Punjab.
The OCAC data shows that she overall decline in sales of petroleum products by the oil marketing companies in 9MFY23 fell by 21 percent year-on-year. Product-wise data showed a decline in all categories; the offtake of FO, HSD, and MS dropped by 33, 25 and 16 percent year-on-year. Going forward, FY23 sales are expected to remain under duress- dropping by around 25 percent year-on-year overall.
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