Pakistan’s overall oil sales plunged 47 per cent year-over-year to 1.171 million tonnes in April, while the total sales shrank by 24pc to 13.970m tonnes in the July-April period of FY23. However, oil sales rose 6pc month-on-month in April. Furnace oil (FO) consumption in April 2023 was 72,000 tonnes compared to 461,000 tonnes in April 2022, while sales fell 16pc on MoM. The July-April FY23 FO sales clocked in at 1.866m tonnes, 40pc down from the same period last fiscal year.
A 50pc decline was witnessed in diesel sales to 461,000 tonnes in April 2023 from 919,000 tonnes in April 2022, while a 28pc drop was recorded in 10MFY23 to 5.283m tonnes. However, there was an increase of 16pc MoM sales. Petrol sales posted a drop of 25pc YoY in April 2023 to 580,000 tonnes, while it recovered by 4pc MoM. Total petrol sales in 10MFY23 declined by 17pc to 6.173m tonnes.
An analyst at Top Line Research said April 2023 YoY fall in sales was mainly driven by a massive drop in FO and diesel sales. “During 10MFY23, oil sales were down due to economic slowdown with a decline visible in all major petroleum products. Higher inflationary environments, particularly the prices of petrol and diesel have had a major impact on demand,” he said.
The analyst anticipated depressed oil sales in the future amid high inflationary pressure and the government’s inability to lower oil prices. An analyst at Insight Research said the influx of Iranian petroleum products also hit domestic sales, while demand for furnace oil remained thin due to low power generation.
However, sales recovery in diesel during April 2023 from March 2023 was due to higher transport activities amid the Eid holidays and harvesting of wheat crop.
“The widespread availability of Iranian diesel, especially in the country’s southern region, is hurting diesel offtake due to a significant price differential between Pakistani and Iranian diesel. Foreign exchange scarcity to import petroleum products is further causing the authorities to turn a blind eye to this issue,” the analyst said.
Global oil prices are witnessing a decline, with Brent trading at $75/bbl, down from the average of $84/bbl in April 2023. The analyst added that if this trend continues along with the stability of the rupee against the dollar, petroleum prices are likely to go down, which may lead to an improvement in sales of oil marketing companies in the upcoming months.
Attock Refinery Limited (ARL), in a stock filing on Wednesday, said stocks of diesel in the refinery reached a high level with very little/no ullage in storage tanks.
“We are left with no option except to go for a shutdown of our main distillation unit of 32,400 barrels per day to manage the critically high diesel stocks and carry out essential maintenance including that of allied downstream units for five days.”
Diesel lifting by the oil marketing companies (OMCs) from ARL has remained low during the last two months due to multiple reasons including the possible inflow of smuggled products. ARL said the refinery would partially operate at around 25pc capacity during the said period. However, adequate inventories of products are available to meet the demand.