KARACHI: Fuel oil sales dropped drastically in November after the government switched off a number of mega oil-fired power plants, decrease in use of home-based power generators and a slight increase in compressed natural gas (CNG) supply.
Sales of furnace oil declined 34% to 565,000 tons in November from 856,000 tons in the previous month. Similarly, sales of petrol (mogas) fell 6% to 534,000 tons in November from 571,000 tons in October, according to Elixir Securities.
An official of a leading oil marketing company linked the decline in furnace oil sales with the abrupt shutdown of at least four mega power plants in November.
An official in the Ministry of Water and Power said the plants were switched off after electricity demand came down by 7,000 megawatts from its summer peak.
The plants were running at power stations of Muzaffargarh, Jamshoro, Nandipur and Hubco. “They were producing the most expensive power in the energy mix,” he said.
The decline in demand appears to be seasonal as winter has arrived in the country.
The decline in petrol sales may be attributed to an apparent drop in use of home-based generators in slightly cold days. Moreover, increase in CNG supply, especially in Punjab, may have caused the drop in petrol sales.
Many of the CNG filling stations in Punjab have resumed sales after import of re-gasified liquefied natural gas (LNG).
Sales of all types of oils declined 11% from 2.31 million tons in October to 2.05 million tons in November.
In the first five months (July-November 2016) of the current fiscal year, oil sales increased 16% to 10.79 million tons from 9.31 million in the same period last year.
Published in The Express Tribune, December 3rd, 2016.