Oil sales fall due to sluggish industrial output

Sales decreased 27% to 1.44m tons in December 2018

KARACHI: Petroleum oil sales have dropped due to a slowdown in industrial output, gradual abandoning of furnace oil, smuggling of diesel from a neighbouring country and price hike in the recent past.

Oil sales fell 27% to 1.44 million tons in December 2018 compared to 1.96 million tons in the same month of previous year, according to a brokerage house.

The drop in sales was led by furnace oil, which had been given lowest priority by the government in power production due to its high price compared to gas and coal.

Excluding furnace oil, the sale of the petroleum products used in industrial production, public transport, cars and motorcycles surprisingly exhibited a downturn in the month.

The sale of diesel dropped 27% to 564,000 tons in December 2018 compared to 771,000 tons in December 2017. The sale of petrol edged down 1% to 600,000 tons compared to 605,000 tons last year.

Furnace oil sales halved to 225,000 tons in Dec 2018 compared to 481,000 tons in the corresponding period of previous year.

Topline Securities, in a report, said the drop in petroleum product sales came after a price hike, smuggling of diesel from neighbouring Iran and decrease in consumption in large-scale manufacturing industries.

Sales down in CY18

Shajar Research said in its comments that oil sales during the year ended December 31, 2018 recorded a decline of 21%, primarily led by a massive 50% fall in furnace oil sales.

Sales during the year stood at 20.4 million tons compared to 25.7 million tons in the previous calendar year.

Similarly, furnace oil sales declined to 4.3 million tons, down 50%, followed by diesel at 7.9 million tons, down 10.3%. Petrol sales increased a meagre 2% to 7.3 million tons in the year. 

Published in The Express Tribune, January 3^rd, 2019.

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