ARSHAD HUSSAIN
Total oil sale of Pakistan was up by 13 per cent year on year (YoY) to 2.4 million tones in October 2016 as sharp growth in white oil continued to support oil sales, while four month (Jul-Oct 2016-17) sales have gone up to 8.9 million tones which is up 17 per cent YoY.
The analyst at Toplines brokerage house said the sales were in line with estimates.
Sales of High Speed Diesel (HSD) were up by 17 per cent YoY to 834,000 tons led by increased demand from transportation and power sector. MOGAS (MS) sales were also up by 12 per cent YoY to 573,000 tones.
Increase in power generation in the country also led to uptick in Furnace Oil sale as it increased by 10 per cent YoY to 875,000 tones in October 2016.
Pakistan State Oil (PSO) sales outperformed the market growing by 17 per cent to 1.4 million tones driven by strong HSD sales that were up 31 per cent. As a result, PSO market share increased to 58 per cent in Oct 2016 from 56 per cent in the same period last year. Hascol Petroleum (HASCOL) also witnessed an impressive sales growth of 25 per cent.
Attock Petroleum (APL) underperformed as their sales increased by 4 per cent whereas Shell Pakistan (SHELL) reported 3 per cent decline.
Refinery supplies to Oil Marketing Companies (OMCs) were down 6 per cent to 917,000 tones. This decline was mainly attributed to decline in HSD supplies (down 16 per cent YoY) as OMC had adequate HSD stocks, the analysts believe. In Jul-Oct 2016-17, refinery supplies were up 4 per cent to 3.5 million tones.
Furnace Oil and MOGAS supplies increased by 6 per cent and 3 per cent to 272,000 tones and 154,000 tones, respectively.
According to the analysts, dynamics for oil marketing companies (OMC) sector remains favourable as improving macros, increase in demand from auto sector and higher power generation are likely to drive OMC sales going forward. Linkage of margins on retail products (HSD & MOGAS) with CPI inflation also bodes well for the sector profitability.