KARACHI: In December 2022 oil sales in the country decreased by 14 percent on month-on-month basis to 1.34 million tons as compared to the previous month. The decline in oil sales was mainly due to seasonal trend of slowdown in December, lower demand of FO for power generation and overall slowdown in the economy, experts said.

This is the lowest monthly sales figure since the first Covid-19 lockdown period of February-April 2020 when the sales of FO/HSD/MS declined by 10 percent, 22 percent and 8 percent on MoM basis, respectively.

The total oil sales recorded decline of 11 percent year-on-year in December 2022 as compared to the same month of 2021 due to drop in sales of all major petroleum products, as MS was down 11 percent, HSD down 15 percent and FO down 3 percent on YoY basis.

The YoY drop in oil sales was primarily due to higher fuel prices, overall reduction in economic activity and lower FO-based power generation, said Nasheed Malik of Topline Securities.

Among the listed entities, the Pakistan State Oil (PSO) posted a decrease of 23 percent on MoM basis and 9 percent on YoY basis to 626,000 tons. The PSO’s market share improved to 47 percent in December 2022 as compared to 46 percent in December 2021.

The sales of Attock Petroleum Limited (APL) declined 9 percent on MoM basis and 16 percent on YoY. Shell Pakistan’s (SHELL) sales decreased by 4 percent on MoM and by 18 percent on YoY basis. The market shares of APL and SHEL for December 2022 were 9 percent and 8 percent respectively as compared to 10 percent and 9 percent in December 2021.

During the first half of FY23, the oil sales are down 19 percent on YoY basis to 9.03 million tons due to economic slowdown with decline visible in all major petroleum products, Nasheed Malik said, adding that higher prices of MS and HSD have also had a major impact on demand.

Product-wise FO and HSD have witnessed the largest drop with a decline of 24 percent and 23 percent on YoY basis, respectively, while MS sales declined by 15 percent on YoY in the first half of FY23.

“We expect FY23 oil sales to drop by 20 percent on YoY basis, mainly due to overall slowdown in the economy. Local prices are set to remain elevated due to government’s lesser fiscal space, which would continue to dent demand,” Nasheed Malik said.

Copyright Business Recorder, 2023