Petroleum sales rise by 4% in March amid economic revival, reduced smuggling

Year-on-year improvement in oil sales is seen as a positive sign of economic stabilization

Pakistan witnessed an increase in petroleum sales in March 2024, with figures reaching 1.15 million tonnes, marking a 4% rise compared to the same period last year.

This surge is attributed to the slight recovery in economic activities and efforts to curb the smuggling of petroleum products.

The oil sales data highlighted that petrol sales went up by 3%, totaling 0.57 million tonnes.

Additionally, High-Speed Diesel (HSD) saw a significant uplift of 17%, amounting to 0.46 million tonnes. In contrast, furnace oil (FO) sales experienced a sharp decline of 48%, dropping to 0.04 million tonnes, reflecting the reduced reliance on FO-based power plants.

On a month-to-month comparison, petroleum sales exhibited a growth of 3% in March 2024.

This increase is partly due to the shorter month of February and a rising price trend in Motor Spirit (MS), which saw a 5% growth.

HSD off-take also witnessed a 4% month-to-month increase. Conversely, FO dispatches saw an 11% decrease.

Looking at the broader fiscal year, the first nine months saw an 11% decrease in petroleum product sales, totaling 11.34 million tonnes, down from 12.80 million tonnes in the corresponding period of the previous year. This downturn was evident across major petroleum products, including MS, HSD, and FO.

The year-on-year improvement in oil sales, marking the first in 21 months, is seen as a positive sign of economic stabilization.

Despite challenges such as oil smuggling from Iran, which is estimated at 4,000 tonnes daily, the overall market outlook appears to be improving.

Among the notable companies, Attock Petroleum (APL) reported a decrease in sales, while Pakistan State Oil (PSO) and Shell Pakistan (SHEL) both reported increases.

PSO, in particular, noted an 11% year-on-year rise in sales, bolstering its market share to 51% in March 2024.

The report also cautions about potential challenges ahead, including the impact of smuggling and possible government policy changes, such as increasing the Petroleum Development Levy or introducing an 18% GST, which could further affect sales.

 

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