Furnace oil sales jump over power sector demand

KARACHI: Pakistan’s total oil sales rose by 11 per cent to 11.258 million tonnes during the first seven months of FY21 owing to a massive jump in demand for furnace oil (FO), high-speed diesel (HSD) and petrol.

A jump of 37pc was recorded in FO sales to 1.916m tonnes during July-January period of 2020-21 followed by 12pc and 6pc in HSD and petrol, respectively, to 4.288m tonnes and 4.740m tonnes.

Syed Fawad Bashir of Topline Securities attributed rising furnace oil sales to burgeoning demand from the power sector due to gas shortage issues during winter and an overall pick-up in economic activity following improvement in the Covid-19 situation.

Petrol sales have remained robust following rising sales of cars, LCVs and two/three wheelers during 1HFY20. According to figures of Pakistan Automotive Manufacturers Association (PAMA), car sales went up by 13.4pc followed by 134pc in jeeps, 32pc in LCVs (pick ups) and 19pc in two/three wheelers.

Another reason of rising petrol sales was switching over of car and CNG rickshaw owners towards petrol due to prolong shutdown of CNG pumps in Sindh and in upcountry under a gas loadshedding programme to provide uninterrupted gas to the household consumers.

In the last few months, the price of HSD and petrol continued to crawl up on account of rising crude oil prices but it did not affect sales of four-wheelers.

HSD and petrol now sell at Rs116.08 and Rs111.90 per litre, respectively, compared to Rs101.43 on Rs100.69 on November 16, 2020.

However, increase in HSD demand appears surprising keeping in view of declining heavy vehicle sales from July to December 2020. Truck and bus sales fell 3.2pc and 20.4pc, respectively.

Petrol sales may further improve in coming months following launch of various Chinese and Korean cars, SUVs, jeeps etc in the last two months and massive imports of vehicles by the new entrants in the first half of FY21.

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