Oil sales increase 12 per cent

Attock gains the most share while circular debt haunts PSO.

KARACHI:

Oil sales rose 12 per cent to 1.8 million tons in May on a monthly basis on the back of 20 per cent and 9 per cent increase in furnace oil and high speed diesel sales, respectively.

The sequential jump is largely seasonal due to pick up in agricultural activities ahead of the Kharif season, according to a JS Global Capital research note.

Pakistan State Oil (PSO), the country’s largest oil market company, sales in May plummeted 10 per cent on a yearly basis as its furnace oil sales declined by 18 per cent. The slide in furnace oil sales is mainly due to supply shortages arising from lack of funds to arrange for imports, note says.

However, the release of Rs89 billion to PSO in May on account of the circular debt should improve furnace oil volumes from June onwards.

The company still managed to reach its highest ever monthly motor gasoline sales of 100,000 tons, up 38 per cent on a yearly basis.

Moreover, the company’s sales during in the first eleven months of fiscal 2011 declined by 10 per cent to 11.6 million tons, resulting in it’s market share dropping to 64 per cent  from last year’s 70 per cent.

Attock Petroleum recorded an impressive growth of 76 per cent in May owing to expansion of its retail distribution network. The company increased its retail outlets to 302 stations as of March 31, 2011 from 277 last year.

Moreover, its furnace oil sales improved by 61 per cent YoY to 64k tons mainly on the back of increased industrial clientele and agreements of fuel supply with two rental power plants.

Hence, the company’s sales grew by 25 per cent to 1.3 million tons in the first eleven months of fiscal 2011, resulting in its market share climbing to 7 per cent against 5.5 per cent posted last year.

Shell’s oil sales during May witnessed a notable contraction of nine per cent largely driven by a fall of 83 per cent in its furnace oil sales.  The decline in furnace oil sales is largely due to violation of FSA by Nishat Power and Nishat Chunian Power, note adds. The lost Shell sales were gained by Attock Petroleum and Parco.











Published in The Express Tribune, June 11th, 2011.