Owing to increase in car sales and better economic activities, petrol (MOGAS) and diesel (HSD) sales remained strong during April 2016, increasing by 12 per cent and 6 per cent on year on year (YoY) basis to 0.5 million and 0.7 million tones respectively.
Because of the import of liquefied nature gas (LNG), the demand of furnace oil (FO) sales remained under pressure as it declined 24 per cent YoY to 0.6 million tonnes in April 2016. As a result, total oil sales of the country were down 5 per cent YoY to 2 million tones in April 2016.
In last 10 months of the current fiscal year, oil sales registered growth of 4 per cent to 18.8 million tones led by MOGAS and HSD sales which are up 25 per cent and 4 per cent respectively. Furnace oil (FO) sales were down 6 per cent to 7 million tones in the stated period.
“Sales of MOGAS and HSD remained strong due to sharp fall in petroleum product prices thus increasing consumer purchasing power,” said Umair Naseer, analyst at top line brokerage house. “MOGAS and HSD prices have both come down by 13 per cent YoY in April 2016 to Rs 64 per liter and Rs73/ltr. Furnace oil (FO) sales have come under pressure due to availability of LNG to power plants and industrial sector, he said.
With expanding country-wide network, Hascol Petroleum’s (HASCOL) sales showed strong growth of 67 per cent YoY to 142,000 tones with market share improving to 7 per cent in April 2016 vs 4 per cent in April 2015. Sales of Pakistan State Oil (PSO), Pakistan’s largest oil marketing company, came down by 8 per cent YoY to 1.1 million tones driven by lower FO sales.
Analyst believed that due to increasing demand of retail products, improving economic activity and increasing car sales, oil marketing companies (OMCs) are likely to benefit from increasing sales volume of MOGAS and HSD as margins on these items are fixed in rupee terms in contrast to FO where margins are as a percentage of revenues.
Due to subsiding cash flow problems, Sales of Pakistan State Oil increased demand of retail products, and upside from LNG sales since PSO is the only OMC importing LNG. The sales from LNG have compensated for declining FO sales in case of PSO, he said.
