Oil consumption loses momentum in November

0
54

KARACHI: Oil consumption in November has dwindled six percent annually and 19 percent monthly; primarily led by an annual eight percent and 33 percent monthly fall in furnace oil (FO) sales. In addition, fewer working days in November and abnormally high sales in the preceding month have caused the sequential decline. PSO and APL sales slumped by a monthly 22 percent and 24 percent respectively, while volume of SHEL was three percent less than last month’s figure.
However, overall volumes are expected to augment in the months to follow, led by a recovery in FO sales, and reach 20.4 million tonnes (up one percent annually) for the financial year 2011. Oil consumption failed to sustain the impetus in the previous month.
It is pertinent to mention that consumption improved by a monthly 34 percent in October. Fewer working days due to Eid holidays and abnormally high consumption in October (displaced demand carried over from previous two months) drove down FO and HSD volumes by a monthly 33 percent and eight percent respectively.
Current year consumption, which includes five months of financial year 2011, now trails five percent compared to last year; primarily due to a sharp slide in sales during August and September. PSO has ended the month as the chief sufferer, as its sales declined by an annual 11 percent. This is because PSO is the main fuel supplier to flood inundated power plants. Conversely, volumes of APL and SHEL have exhibited an annual increase of eight percent and 18 percent respectively. This rise has been driven by higher FO sales to new clients.
The vital resolution of the turnover tax rate is likely to act as a key earnings trigger for PSO in the second quarter of FY11, with Rs 21/share reversal expected to be booked in the coming quarter, said Atif Zafar at JS research.