Pakistan’s total petroleum products off-take rose 17 per cent on a year-on-year basis to 1.99 million tonnes in October 2021, compared with 1.70 million tonnes sold in the same period of the last year, the official data showed.
“Growth was witnessed in all the three major fuels, supported largely by recovering economic activity. The total sales grew 22 per cent on a year-on-year basis to 7.85 million tonnes during the first four months of FY22 because of increase in industrial and transportation activities,” according to a KASB Research report.
Motor gas sales rose 14 per cent on a year-on-year basis in the first four months of FY22 to 3,116,000 tonnes during the first four months of FY22.
The rise in sales is due to the increased automobile sales, reduced parity between the compressed natural gas (CNG) and Mogas prices, limited supply of CNG, and increased transportation activity driven by relaxed restrictions.
In October 2021, Mogas sales dipped 5 per cent on a month-on-month basis to 766,000 tonnes because of high base in anticipation of price hikes in September 2021. The Pakistan State Oil recorded the highest market share of 46 per cent in the first four months of FY22. An increase of 27 per cent on a year-on-year basis was recorded in sales of high-speed diesel during the period under review to 2,936,000 tonnes.
The rise in sales is due to the increased economic activity, amid easing restrictions. On a monthly basis, HSD sales jumped 18 per cent on a month-on-month basis to 837,000 tonnes in October 2021. PSO recorded the highest market share in the commodity at 50 per cent during the first four months of FY22.
Similarly, furnace oil sales rose 32 per cent on a year-on-year basis in the first four months of FY22 to 1,598,000 tonnes, because of increased reliance on FO-based generation. Falling gas supply and rising prices have compelled the use of FO as a substitute.
On a monthly basis, the furnace oil sales dipped 19 per cent on a month-on-month basis because of reduced demand for electricity during the cooler months and rising hydel-based generation.
The research report anticipates a rise in the furnace oil sales over the medium-term because of the global liquefied natural gas (LNG) shortage. The shortage has already compelled the government to import FO to ensure adequate electricity supply during the winter months.
“PSO remains our top pick in the oil marketing companies’ space because of fundamental improvements in the company’s dynamics. The company is benefitting from increasing petroleum sales and expected inventory gains, amid rising petroleum prices. Our June 2022 take profit for the stock stands at Rs292/share up 48 per cent,” the report noted.
