The sales of petroleum oil products in Pakistan hit two-year high level of 1.7 million tons in October with high speed diesel (HSD) leading the rally from the front.
The overall sales increased 11% to 1.7 million tons in October compared to 1.52 million tons in September.
The growth in the sales may be attributed to revival of economic activities as large scale manufacturing sector ie fertiliser, cement and steel are showing gradual growth in production over the past couple of months.
The growth in overall sales is “backed by a sharp 43% sequential (month-on-month) increase in high speed diesel demand,” JS Research analyst Ali Zaidi said in a commentary.
Diesel sales stood at 0.67 million tons in October compared to 0.47 million tons in September. Diesel is mostly used by the commercial transport sector and partially by the agriculture sector. However, source of growth in the fuel remained unknown.
The sales of the fuel (HSD) had stood around current levels – 0.65 million tons – in the same month of the last year as well, according to oil sales numbers for October 2019.
Besides, the sales of petrol improved 7% to 0.69 million tons in October compared to 0.64 million in September. The fuel is largely consumed by motorcycle and car commuters. The sale of furnace oil, which is mostly used by oil-fired power plants, dropped 22% to 0.29 million tons during the month compared to 0.37 million tons in the previous month. The drop may be attributed to start of winter season when demand for power drops.
However, the strong demand for retail fuels (petrol and diesel) was more than sufficient to compensate for the 22% month-on-month decline in demand for the furnace oil, Zaidi said.
The consumption of furnace oil, however, remained higher in October due to the worsening gas crisis in the country during the month compared to the same month of previous year. This development encouraged the concerned authorities to replace gas-based power production with furnace oil. The sale of furnace oil surged 46% to 0.29 million tons in October compared to 0.2 million tons in October 2019.
“The uptick in furnace oil volumes is largely attributable to its low price resulting in higher furnace oil-based power generation and overall jump in economic activity following improvement on Covid-19 front,” Topline Research’s analyst Fawad Basir said in a commentary on overall oil sales.
Cumulatively, in the first four months (Jul-Oct) of the current fiscal year, overall oil sales increased 7% to 5.99 million with 32% growth in sales of furnace oil at 0.92 million tons, 6% increase in HSD at 2.9 million tons and 5% surge in sales of petrol at 2.62 million tons.
Company-wise sales
During October 2020, Hascol Petroleum Limited reported the strongest growth in overall sales (32% month-on-month) backed by strong sales in HSD. Similarly, Shell Pakistan Limited reported a 22% month-on-month increase followed by Pakistan State Oil (PSO) with a 10% month-on-month increase in overall sales.
