Pakistan’s Oil Marketing Companies (OMCs) recorded a 4 percent year-on-year growth in total volumes for the first half of FY25, reaching 8.03 million tons. Excluding Furnace Oil (FO), sales grew by 8 percent year-on-year, demonstrating a strong recovery from the prior year. This growth was driven by macroeconomic stabilization, with recovering economic activity and reduced petroleum product prices, as High-Speed Diesel (HSD) prices were down 9 percent year-on-year and Motor Spirit (MS) prices were 8 percent lower year-on-year. Stricter enforcement actions against smuggling also lifted official sales of HSD and other products, while seasonal demand variations limited growth in December (winters) but did not deter overall performance for the first half of the fiscal year.
Product-wise, HSD sales increased by 10 percent year-on-year to 3.46 million tons, MS sales rose by 5 percent year-on-year to 3.75 million tons, and HOBC sales surged by 119 percent year-on-year during 1HFY25.
Petroleum sales in December 2024 totaled 1.28 million tons, marking a 3 percent year-on-year increase but a sharp 19 percent month-on-month decline due to seasonal factors. HSD volumes rose by 12 percent year-on-year to 573 thousand tons, driven by lower prices and anti-smuggling actions but fell by 27 percent month-on-month due to reduced mobility after the Rabi sowing season. MS volumes were marginally down by 1 percent year-on-year to 566 thousand tons, reflecting decreased travel during winter vacations. HOBC and kerosene recorded sharp increases of 252 percent and 66 percent year-on-year, respectively, driven by a narrowing price gap between fuel grades and reliance on alternative fuels during the winter.
For the calendar year 2024, the OMC sector exhibited mixed results. Sales recovery gained momentum in the second half of the year due to declining crude oil prices and a steady exchange rate. However, lingering effects of high inflation and smuggling disruptions earlier in the year tempered overall performance. The industry saw growth in retail fuels, while FO sales continued to decline, reflecting a structural shift away from heavy fuels to cleaner energy sources. Cumulatively, the three key fuels depicted a growth of around 2 percent year-on-year in CY24 versus CY23.
The OMC sector is expected to grow modestly in FY25. A rebound in industrial and commercial activity is anticipated to drive demand for petroleum products, and continued moderation in global crude oil prices along with stable domestic pricing should support volume growth. However, smuggling, seasonal variations, and stiff competition from smaller players remain key risks. Additionally, the Petroleum Development Levy (PDL) collection may fall short of its annual target, potentially leading to policy adjustments.
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