Record high prices drive down oil demand to 1.06m tons in Sept
KARACHI: The demand for petroleum products in Pakistan hit a 44-month low at 1.06 million tons in September 2023, primarily due to a surge in prices in line with global uptrend.
Topline Research analyst Myesha Sohail, in a commentary, said sales of petroleum products declined to the lowest level since the Covid-19 lockdown in March 2020, with petrol sales down 23% month-on-month (MoM) and diesel sales down 28% MoM.
The decrease was primarily attributed to record high prices, availability of smuggled oil from Iran and lower furnace oil-based power generation.
AHL Research analyst Muhammad Iqbal Jawaid added that economic slowdown and a fall in automobile sales also contributed to the shrinking demand for petroleum in September.
“We believe the recent decline in petrol and diesel prices along with tight security over borders will improve oil sales next month,” Sohail projected.
Pakistan recorded monthly sales of 1.06 million tons, down 31% year-on-year (YoY) and 25% MoM.
High-speed diesel (HSD) sales were the lowest since the Covid lockdown, reaching 394,000 tons in September 2023. HSD sales fell 24% YoY and 28% MoM due to increasing prices.
HSD prices rose 12% from Rs293 per litre in August 2023 to Rs330 in September 2023.
Motor spirit (petrol) sales dropped 18% YoY and 23% MoM to 518,000 tons in September 2023, the lowest since March 2020. It was also owing to a big increase in petrol prices, resulting in lower demand.
Petrol prices rose 14% from Rs290 per litre in August to Rs331 in September.
Furnace oil sales fell 72% YoY and 28% MoM to 84,000 tons because of lower demand for oil-based power generation.
During the first quarter of FY24, sales of petroleum products registered a decline of 16% YoY to 3.77 million tons compared to 4.49 million tons in the same period of last year.
Product-wise data showed a reduction in all categories. The offtake of motor spirit, HSD and furnace oil came in at 1.85 million tons, 1.44 million tons and 0.35 million tons, respectively.
Among listed entities, sales of Pakistan State Oil (PSO) in September declined by 37% YoY and 30% MoM to 510,000 tons. It was mainly owing to reduced sales in all sections, but furnace oil was a major factor with a decline of 94% YoY and 61% MoM.
Shell Pakistan’s sales decreased by 30% YoY and 18% MoM to 80,000 tons. Similarly, Attock Petroleum’s sales fell 13% YoY and 18% MoM to 123,000 tons.
