The oil sales by the oil marketing companies during March 2024 saw a rise of 4 percent year-on-year, and three percent month-on-month. The growth in volumetric sales by the oil marketing sector broke the declining streak that has been going on for months due to the economic downturn in the country. In March, as per the data by OCAC, the growth was led by High Speed Diesel that witnessed an increase of 17 percent year-on-year due to improved economic activity and reduction in smuggled diesel from Iran. The growth in Motor Spirit (petrol) was in single-digit at three percent year-on-year, while furnace oil volumes were seen falling drastically again by 48 percent year-on-year due to lower consumption in the power sector and availability of cheaper alternate fuels. The month-on-month growth in OMC volumes is attributable to the higher number of days during Mar-24 versus Feb-24 that had 28 days in total.

However, during the nine months of FY24 (9MFY24), petroleum consumption continued to fall as the overall trend has been negative growth. OMC sales in 9MFY24 were down by 11 percent year-on-year With all three key petroleum products posting a decline in volumes during the period. Furnace oil witnessed a sharp decline of around 52 percent year-on-year, while high-speed diesel and motor-spirit declined by 5 percent, year-on-year, each.

Petroleum prices are set to increase going forward as the IMF has demanded the reintroduction of 18 percent sales tax on fuel. The first glimpse of the increase in petrol prices has been witnessed on April 1, 2024, where the government jacked up MS prices by around Rs9.6 per liter, though diesel users were given a relief of Rs3.3 per liter. Prices are likely to rise in the coming months due to rising geopolitical tension in the Middle East as well as Russia.