Despite energy shortfall the consumption of oil in the country declined by 3 percent during fiscal year 2011-12 to 19.1 million as against 19.7 million recorded in FY11.
This is the second consecutive year that oil consumption has posted a decline. “The reduction primarily came from 7 percent decline in FO (furnace oil) sales which account for approx. 45% of total oil consumption in Pakistan,” said Topline Research analyst Nauman Khan. Despite electricity shortage, cash problems amid circular debt prompted power units to consume lower furnace oil for electricity generation which decline by 7% to 8.4mn tonnes. According to estimates, power sector consumed 5% lower FO as government increase gas supplies by 4% which is cheaper source of generation for power units as power sector has been given priority over others sectors in terms of gas allocation. Moreover, liquidity constraints with OMCs also led to restricted FO supplies.
Gasoil (commonly known as HSD or diesel) sales declined by 1 percent to 6.8mn tons. However, in FY12 diesel consumption could have been much higher as local diesel market was also infiltrated by smuggled diesel from Iran whose share in local market had increased in past few months. The reason being the rising price disparity between the two products as Pakistani diesel is now more costly that Iranian diesel due to continuous rise in taxes on local product.
Sales of gasoline (petrol) depicted a robust growth of 21% on the back of growing auto market and rising gas curtailment to CNG sector prompting consumers to switch towards gasoline. Its share of total oil consumption rose to 14% in FY12 against 12% last year, while it was 8% in FY08.
Amongst the individual companies, PSO continue to remain the major victim of circular debt that has approx. 80% market share in FO segment.
Company’s sales declined by 3% in FY12 to 12.4mn tons, but was able to maintain its market share. APL on the other hand benefited from higher petrol sales with company’s sales increasing by 13% in the year.
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