The total sales of petroleum products in Pakistan have seen a significant decline, decreasing by 11 percent year-on-year (YoY) to 1.20 million tons in July 2024. This reduction is attributed to multiple factors, including increased prices of motor spirit (MS) and high-speed diesel (HSD), the availability of smuggled petroleum products from Iran, and a drop in demand for furnace oil (FO) based power generation.
Muhammad Iqbal Jawaid at Arif Habib Limited commented on the situation, highlighting that the hike in the prices of MS and HSD has led to lower consumption. This price increase, combined with the availability of cheaper smuggled products, has significantly impacted the overall sales volume.
In July 2024, the sales of motor spirit (MS) decreased by 10 percent YoY, settling at 0.59 million tons. High-speed diesel (HSD) off-take also saw a decline, dropping by 6.0 percent YoY to 0.46 million tons. The most notable decrease was observed in furnace oil (FO) sales volumes, which plunged by 46 percent YoY to 0.08 million tons.
On a month-on-month (MoM) basis, the dispatches of petroleum products contracted by 17 percent in July 2024 due to the aforementioned reasons. The off-take of MS plummeted by 16 percent MoM in July 2024, while the dispatches of HSD dwindled by 18 percent. FO sales reduced even further, by 27 percent MoM.
When examining company-wise sales, Pakistan State Oil (PSO) experienced a significant decline. The sales of PSO plummeted by 19 percent YoY to 0.55 million tons in July 2024. Specifically, PSO’s off-takes of MS, HSD, and FO contracted by 22 percent, 22 percent, and 17 percent YoY, respectively.
Other companies also faced declines in their sales volumes. SHELL, HASCOL, and APL witnessed declines of 8.0 percent, 12 percent, and 23 percent YoY, respectively, during July 2024.
PSO’s market share saw a reduction of 4.6 percent, settling at 45.6 percent compared to 50.2 percent in July 2023. Similarly, the market share of APL reduced by 1.2 percent, arriving at 8.5 percent YoY in July 2024. On the other hand, the market share of SHELL slightly increased, arriving at 7.2 percent compared to 7.0 percent in the same period last year. HASCOL’s market share remained unchanged at 3.2 percent. Other oil marketing companies (OMCs) saw their market share climb by 5.6 percent, reaching 35.4 percent in July 2024.
Several factors contributed to the decline in petroleum sales. The primary reason was the hike in prices of MS and HSD, which discouraged consumers from purchasing these products. Additionally, the availability of smuggled petroleum products from Iran provided a cheaper alternative, further reducing the demand for locally sourced petroleum products.
Another significant factor was the fall in demand for furnace oil-based power generation. As the demand for FO decreased, so did its sales volume, contributing to the overall decline in petroleum product sales.
