Despite increasing energy demand in the country, complimented with a severe gas shortage, the oil consumption in Pakistan witnessed a slump of 3.1 per cent during the fiscal year 2010-11.
Oil consumption has fallen to 19.6 million tonnes against 20.3 million tonnes during FY10, according to analysts. “Catastrophic floods and subdued trade activity adversely impacted oil sales in 1H, while 2H was marked with product unavailability,” explained an analyst at Topline Securities, Nauman Khan.
High Speed Diesel consumption falls by 7.3 percent: Subsequently, he said, the sale of furnace oil and High Speed Diesel, which cumulatively contributes 85 per cent to national oil consumption, declined by 2.2 per cent and 7.3 per cent, respectively.
An exception to the declining trend was witnessed in sales of Motor Spirit, which surged by 18 per cent in FY11 on account of prevalent gas curtailment to the CNG sector.
PSO sales decline by 10.6 percent: A company-wise data shows that, on account of the aforementioned factors, Pakistan State Oil’s (PSO) sales declined by 10.6 per cent, while picking up lost ground Shell Pakistan and APL’s (Attock Petroleum) sales increased by 10 per cent and 22 per cent, respectively. “In FY12, with economic activity picking up pace and gas price rationalisation under process, we expect oil sales to resume an upward trend in FY12,” the analyst said. Analysing the decline in oil sales, Khan explained that the first half, July-December, of FY11 was dominated by detrimental effects of floods that forced temporary closure of few big IPPs thereby reducing trade activities and adversely impacting sales of oil products particularly in the months of August and September.
Furnace oil sales shrink by 2.2 percent: Second half, January-June FY11, was marked with product unavailability on account of reduced imports from OMC’s in April due to liquidity crunch and lower throughput of refineries in May on account of a faulty plate-former in NRL MS. Amongst individual products, Khan said, FO and HSD sales saw a respective decline of 2.2 percent and 7.3 percent to 9.0 million tonnes and 6.9 million tonnes during the year in review. MS sales however increased by a massive 18.1 per cent to 2.2 million tonnes. During June, oil sales stood at 1.8 million tonnes, up 4 per cent (YoY) and 6 per cent (MoM) on account of increasing sales in the FO and MS. FO sales surged by 7 percent YoY and 9 percent MoM while MS sales increased by a significant 20 percent YoY and 9 percent MoM. “Higher exposure to circular debt, strained the liquidity position affecting PSO’s supply, particularly in the second half, thereby, reducing its market share,” Khan said.
