All the hype around the rebound in petroleum consumption and oil sales has died down as April 2024 recorded the lowest OMC volumetric sales in six months. Total petroleum sales by the oil marketing sector depicted a decline of 6 percent year-on-year, and 4 percent month-on-month.

In April 2024, as per the data by OCAC, the oil sales decline was led by a fall in furnace oil volumes and petrol sales. The furnace oil volumes stood at only 30,000 metric tons on April 24, down by 58 percent year-on-year due to lower demand from the power sector and the availability of alternate fuels for power generation. Reduction in petrol volumes stood at around 9 percent year-on-year due to continuously rising prices of MS and lower consumption. Diesel volumes, however, were higher albeit by only 2 percent year-on-year. This growth was also discouraging as harvesting started in Apr-24 and volumes took a notch up during the harvesting season. The declining retail fuels are also because of the continuously rising inflow of smuggled fuel from Iran. Another reason for the slower growth in volumes was the smaller number of days during the month due to the Eid holidays.

Overall, the OMC volumetric sales in 10MFY24 were also down. The decline was set at 11 percent year-on-year with a fall in all key products due to a slower economic revival, elevated fuel prices, and an influx of smuggled fuel in the country.

Petroleum prices can continue to increase despite the fall of oil prices in the international market as the IMF has demanded the reintroduction of an 18 percent sales tax on fuel. And this won’t bode well for the petroleum consumption in the country and the OMCs in general.