Robust car sales drive up fuel oil demand

OMC sales grow 10% to 2.48m tons in the month

KARACHI: The demand for fuel oils remained high in August 2017, propelled by an increase in sales of cars in Pakistan, said a research house on Wednesday.

“Sales of oil marketing companies (OMCs) grew 10% year-on-year to 2.48 million tons (in August this year),” Topline Securities’ analyst Umair Naseer said in a report prepared for his clients.

The strong growth in sales of retail fuel products was attributed to a robust growth in auto sales and influx of imported cars. “Auto sales grew 15% year-on-year in August 2017,” he said.



Diesel and petrol (white oil) sales surged 25% each to 0.80 million tons and 0.68 million tons, respectively, in August.

Furnace oil sales, however, dropped 7% to 0.90 million tons due to lower demand from power producers, Naseer said.



Cumulatively, in the first two months (July and August) of the current financial year 2017-18, fuel sales edged up 4% to 4.55 million tons.

For the full fiscal year 2017-18, “we anticipate oil sales will improve 6% to 27.7 million tons,” he said.

According to company-wise data, Hascol Petroleum recorded a handsome sales growth of 65% year-on-year in August 2017 with the installation of new storage facilities in Mehmood Kot and Sahiwal.



Pakistan State Oil (PSO) - the state-owned oil marketing major - also outperformed the market as sales accelerated 14%, supported by higher diesel demand that surged 57% to 0.40 million tons.

PSO’s market share improved two percentage points to 58% in August compared to 56% in the same month of previous year. “This came at the expense of Shell, which lost its market share that dropped to 5% from 9% in the same period,” he said.

Published in The Express Tribune, September 7^th, 2017.

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