The government has achieved a significant milestone by surpassing its petroleum development levy (PDL) collection target, accumulating Rs 907 billion within the first 11 months of the fiscal year, as reported by Express Tribune. This achievement underscores the robust performance of the petroleum sector amid evolving market dynamics.
The accomplishment comes at a time of heightened demand for petroleum products, with consumption reaching a nine-month high of 1.4 million tons in May 2024, owing to a reduction in prices. Total consumption from July to May 2023-24 stood at 13.8 million tons, according to data from Topline Research.
Myesha Sohail, an analyst at Topline Research, provided insights into the government’s collection through PDL, projecting a potential collection between Rs 990 billion and Rs 1 trillion. This estimation is based on the monthly average collections of Rs 80-85 billion. The PDL, set at Rs 60 per litre for both petrol and diesel, has contributed significantly to the government’s revenue stream in the petroleum sector.
Oil marketing companies (OMCs) reported robust sales figures in May 2024, with sales reaching 1.39 million tons, marking a 7 per cent year-on-year increase and a notable 26 per cent rise month-on-month. This growth was primarily driven by an 18 per cent year-on-year increase in diesel sales.
Diesel sales witnessed substantial growth in May 2024, recording an 18 per cent rise to 643,000 tons compared to May 2023. This surge was attributed to the harvesting season and a price drop of Rs 16.3 per litre. Additionally, intensified efforts to combat the smuggling of petroleum products contributed to increased sales of high-speed diesel (HSD).
Motor spirit (MS/petrol) sales also saw a modest increase, rising by 1 per cent year-on-year and 14 per cent month-on-month to 607,000 tons in May 2024. However, the cumulative petrol sales for the first 11 months of the fiscal year totaled 6.4 million tons, reflecting a 5 per cent decrease compared to the previous year. The decrease in petrol sales can be attributed to fluctuations in market demand and price adjustments.
Furnace oil sales experienced a significant decline, dropping by 29 per cent year-on-year to 69,000 tons. This decline was primarily due to reduced power generation from furnace oil-based plants, indicating a shift towards alternative energy sources and improved efficiency in the power sector.
