Oil product sales rise 5% with shift to petrol from CNG
PSO leads the market in terms of sales volume in 2015-16
Mubashir Anis Silat of Elixir Securities linked the uptick in sales of petroleum products with the economic development taking place in connection with the $46-billion China-Pakistan Economic Corridor. PHOTO: ONLINE
KARACHI:
Sales of petroleum products picked up 5% to 23.37 million tons in the fiscal year ended June 30, 2016, led largely by cars shifting back to petrol from compressed natural gas (CNG), increased vehicle population and uptick in economic activities.
Sales of motor gasoline, or petrol, which is mostly consumed in vehicles and home-based electricity generators, shot up 22% to 5.75 million tons.
Falling oil prices - opportunity or threat
According to the Pakistan Automotive Manufacturers Association (Pama), another 167,507 passenger cars and 1.22 million motorcycles emerged on roads in the first 11 months (July-May) of the recently ended fiscal year.
Sales of cars and motorcycles surged 22.5% and 19.34%, respectively, in the 11 months with many of them purchased on installments.
According to data of the Pakistan Bureau of Statistics, a quantum jump was recorded in the import of power generators in July-May 2015-16. Imports rose 43% and 39% in rupee and dollar terms, respectively, to Rs7.79 trillion and $813.25 million.
Sales of high-speed diesel, which is mostly consumed in passenger buses and vehicles having high-powered engines, rose 5% to 7.75 million tons in 2015-16.
According to Pama, sales of jeeps, buses and coaches also rose notably during the first 11 months.
Sales of furnace oil, however, dropped 3% to 8.9 million tons in 2015-16 as many power generation projects were shifted to gas from oil in recent months.
PM announces Rs5 reduction in price of petrol
Company-wise sales
Pakistan State Oil (PSO) remained the market leader in terms of sales volume of petroleum products. However, Hascol emerged as a fast growing company that increased its market share significantly.
PSO sold 13.11 million tons of petroleum products in 2015-16, which was 4% higher year-on-year. Hascol saw a 33% rise in its sales to 1.53 million tons.
Attock Petroleum’s sales dropped 17% to 1.75 million tons whereas Shell Pakistan recorded a 5% increase to 2.38 million tons, according to data of the Oil Companies Advisory Committee.
Profit margins
The government has linked profit margins of petroleum dealers with the annual CPI inflation with effect from July 1, 2016. This change in methodology will keep the margins at higher levels with expected rise in the rate of inflation in coming months.
Hassan Raza at Alfalah Securities said the profit margins of diesel and motor gasoline dealers had been increased by Rs0.06 per litre from July 1 in line with the CPI inflation for FY16 at around 2.85%.
Petroleum products: OGRA recommends upward revision in oil prices
“If margins are revised annually in line with the inflation, they will rise to around Rs2.8 per litre by FY20, assuming annual inflation of around 5% each year, which will lead to a sizeable improvement in the profit of oil marketing companies,” he added.
Mubashir Anis Silat of Elixir Securities linked the uptick in sales of petroleum products with the economic development taking place in connection with the $46-billion China-Pakistan Economic Corridor.
Published in The Express Tribune, July 13th, 2016.
Sales of petroleum products picked up 5% to 23.37 million tons in the fiscal year ended June 30, 2016, led largely by cars shifting back to petrol from compressed natural gas (CNG), increased vehicle population and uptick in economic activities.
Sales of motor gasoline, or petrol, which is mostly consumed in vehicles and home-based electricity generators, shot up 22% to 5.75 million tons.
Falling oil prices - opportunity or threat
According to the Pakistan Automotive Manufacturers Association (Pama), another 167,507 passenger cars and 1.22 million motorcycles emerged on roads in the first 11 months (July-May) of the recently ended fiscal year.
Sales of cars and motorcycles surged 22.5% and 19.34%, respectively, in the 11 months with many of them purchased on installments.
According to data of the Pakistan Bureau of Statistics, a quantum jump was recorded in the import of power generators in July-May 2015-16. Imports rose 43% and 39% in rupee and dollar terms, respectively, to Rs7.79 trillion and $813.25 million.
Sales of high-speed diesel, which is mostly consumed in passenger buses and vehicles having high-powered engines, rose 5% to 7.75 million tons in 2015-16.
According to Pama, sales of jeeps, buses and coaches also rose notably during the first 11 months.
Sales of furnace oil, however, dropped 3% to 8.9 million tons in 2015-16 as many power generation projects were shifted to gas from oil in recent months.
PM announces Rs5 reduction in price of petrol
Company-wise sales
Pakistan State Oil (PSO) remained the market leader in terms of sales volume of petroleum products. However, Hascol emerged as a fast growing company that increased its market share significantly.
PSO sold 13.11 million tons of petroleum products in 2015-16, which was 4% higher year-on-year. Hascol saw a 33% rise in its sales to 1.53 million tons.
Attock Petroleum’s sales dropped 17% to 1.75 million tons whereas Shell Pakistan recorded a 5% increase to 2.38 million tons, according to data of the Oil Companies Advisory Committee.
Profit margins
The government has linked profit margins of petroleum dealers with the annual CPI inflation with effect from July 1, 2016. This change in methodology will keep the margins at higher levels with expected rise in the rate of inflation in coming months.
Hassan Raza at Alfalah Securities said the profit margins of diesel and motor gasoline dealers had been increased by Rs0.06 per litre from July 1 in line with the CPI inflation for FY16 at around 2.85%.
Petroleum products: OGRA recommends upward revision in oil prices
“If margins are revised annually in line with the inflation, they will rise to around Rs2.8 per litre by FY20, assuming annual inflation of around 5% each year, which will lead to a sizeable improvement in the profit of oil marketing companies,” he added.
Mubashir Anis Silat of Elixir Securities linked the uptick in sales of petroleum products with the economic development taking place in connection with the $46-billion China-Pakistan Economic Corridor.
Published in The Express Tribune, July 13th, 2016.