After the seven months of the current fiscal year – 7MFY22, the petroleum consumption in the country is up as seen from round 14 percent year-on-year growth in overall petroleum sales by the oil marketing companies. While overall, petroleum sales have increased, the last couple of months of 2021 were relatively slower. Sales of petroleum product declined for the second straight month in December-21, month-on-month. However, this reversed in January 2022 where the petroleum product sales during the month were seen climbing by 20 percent month-on-month. The year-on-year growth in OMC sales was also around 19 in January 2022 as per the latest numbers by the Oil Companies Advisory Committee (OCAC).

While the earlier slowdown has been primarily driven by the decline in furnace oil off take by the power sector and hence a decline in overall furnace oil consumption in the country, the recovery in January 2022 came from better high speed diesel and motor spirit sales by the oil marketing companies. During January 2022, FO sales were down by 11 percent month-on-month, while diesel and petrol sales were up by 36 percent and 16 percent month-on-month respectively. Year-on-year however, FO sales were higher by double due to low base in January 2021. HSD and MS sales increased by 20percent and 6 percent, year-on-year respectively. In 7MFY21. The growth for the three key products – FO, HSD and MS - stood higher by 14, 18, and 11percent year-on-year.

Growth in January 2022 was attributable to retail products and not the furnace oil. The decline in furnace oil consumption was earlier earmarked the power sector. But as seen in January 2022, diesel and petrol volumes rose from reliance of industries on HSD based captive power generation due to shortage of Gas/RLNG as highlighted by Arif Habib Limited. Also significant increase in auto sales, rising use of HSD in the agri sector amid wheat harvesting season along with economic recovery boosted the monthly OMC sales. The rising petroleum sales has also kept petroleum imports higher, and while the rising prices can dent overall consumption, the overall trend is likely to remain upward relative to the pandemic hit years.