Total petroleum and lubricant sales in Pakistan clocked in at 1.44 million tons in July 2022, a decrease of 26% on a month-on-month (MoM) basis while declining 26% on a year-on-year (YoY) basis.
“Oil sales are now down 34% in last two months,” said Topline Securities in a report on Tuesday.
This was mainly due to a significant decline in all three petroleum products: High Speed Diesel (HSD) sales reduced by 38% MoM to 444,000 tons, Motor Gasoline (MOGAS) sales declined by 15% MoM to 594,000 tons and Furnace Oil (FO) sales dipped by 23% MoM to 350,000 tons.
“Major reasons behind the decline in oil sales are, (i) Eid holidays during the first half of July where inter provincial transportation activity subsided which led to low HSD sales, and (ii) monsoon season across the country resulted in lower traffic on the roads,” said Topline Securities.
Oil sales decline 11% in June as high prices dent demand
Dissection of data revealed that growth was witnessed in the prices of MOGAS and HSD, which shot up by 26% & 41% since June 2022.
“We believe this resulted in reduced demand of petroleum products and increase in usage of public transport and car pooling,” said the brokerage house.
On a yearly basis, Pakistan oil sales recorded 26% decline in July 2022 which is owed to drop in MOGAS and HSD Sales by 27% YoY and 38% YoY, respectively. Excluding FO, oil sales were down 31% YoY and 26% MoM in Jul-22 to 1.1mn tons.
“For FY23E, we expect oil sales to drop by ~15-20% YoY in FY23E, mainly due to (i) low growth estimated in agriculture sector, (ii) likely decline in auto sales, and (iii) increase in petroleum prices,” said Topline Securities.
The government on Sunday reduced the price of petrol by Rs3.05 per litre, but jacked up the rate of HSD by Rs8.95 per litre.
After the revision, ex-depot price of petrol came down to Rs227.19 while HSD's rate shot to Rs244.95 per litre. The old price of petrol was Rs230.24 per litre while diesel was at Rs236.00 per litre.
Kerosene oil saw a hike of Rs4.62 with the new price now at Rs201.07. Price of light diesel saw a Re0.12 reduction, taking the price from Rs191.44 to Rs191.32.