KARACHI: Volumes of oil marketing companies are likely to increase 10-12 per cent this fiscal year mainly because of increased furnace oil, petrol and diesel consumption, say analysts. Overall domestic petroleum consumption increased by 4.02 per cent during April.
The total volumes stood at an eight-month high of 1.85 million tons during the month.
Local refineries’ contribution at all time low
Local oil marketing companies (OMCs) contributed only 37 per cent, an all-time low, to the total petroleum products’ consumption against 56 per cent in April 2009, said InvestCap analyst Khurram Schehzad in his research report. Local refinery production was down 12 per cent in April because of heavy losses suffered in recently. As a result of this, the country’s dependence on imported fuels is rising substantially.
Petroleum consumption growth was mainly pushed by 11.3 per cent increase in furnace oil, 31.2 per cent increase in motor gasoline and 1.5 per cent increase in consumption of high speed diesel. These three have a cumulative share of 79 per cent in industry volume growth. Furnace oil alone contributed 49 per cent to the overall growth in petroleum products volumes during the first ten months amid rising energy shortages, which increased usage in fuel oil-base power plants.
Motor gasoline, 24 per cent share in overall volume growth, recorded a decline of 12.4 per cent on monthly basis amid price increase and declining differentials with alternates like CNG and LPG. The 2.1 per cent improvement in high-speed diesel came mainly due to improved agricultural activities with the start of Kharif season, increased transportation activities in the north part of the country and a decrease in the use of Iranian petroleum products.
The Pakistan State Oil (PSO) recorded an eight-month high volume of 1.31 million tons with 11 per cent growth while securing 70.1 per cent of the market pie for the first 10 months of fiscal 2010. Shell underperformed industry volumes the most with 15.8 per cent volume decline on monthly basis while it preserved only 11.9 per cent of the industry volumes. Attock Petroleum Limited (APL) stood with an improved market share of 5.51 per cent.
Published in the Express Tribune, May 11th, 2010.