Pakistan State Oil (PSO), the leading oil marketing company in the country, has captured 89 per cent market share in furnace oil sales with the company's highest-ever single month sales of 775,000 tons in the month of March 2009.
"With gradual release of Wapda payments via IPPs and availability of oil on deferred payments, the oil marketing giant was able to capture 89 per cent market share in FO business during March 2009", analysts said. However, despite robust FO demand, white oil products continued their downward sales trend dragging overall growth to negative 3 per cent in the nine months period of FY09, Farhan Mahmood, an analyst at JS Global Capital said.
According to the latest oil sales figures released by Oil Companies Advisory (OCAC) only in the month of March 2009, overall oil sales recorded an increase of 27 per cent on month-on-month basis mainly due to higher FO demand from thermal power plants. On monthly basis, PSO's FO sales grew by 31 per cent while sales of APL and Shell grew by 16 per cent and 7 percent, respectively.
Moreover, higher demand for FO in the month of March led to 33 per cent rise in FO imports (679,000 tons) as compared to 510,000 tons in the month of February 2009. This is the highest ever monthly import of FO. PSO, being the major oil importer and oil supplier, sold 775,000 tons of FO which is the highest ever sales for the company in a single month.
Though FO sales were up 4 per cent during the nine months period of FY09, it is diesel, which is dragging down industry oil products' sales by 3 per cent. Diesel, which has 41 per cent weight in overall oil products sales witnessed a decline of 9 per cent in the nine months of FY09. This is due to rising price disparity between the smuggled Iranian and local diesel as latter is far more expensive than the former, consequently affecting local diesel sales. Currently, the government is collecting additional revenue of Rs 17 per liter on diesel as PDL.
"With the partial resolution of circular debt led by power sector, we believe FO supplies will improve going forward," he said and added, " For FY09, we are assuming FO sales to grow by 5 per cent whereas we now expect overall oil sales to remain flat as compared to last year amid depressing diesel sales."