Oil sales drop to decade low

KARACHI: Petroleum oil sales dropped to a decade low in first nine months of the current fiscal year following a notable slowdown in economic growth and contraction in the number of vehicles.

High-speed diesel (HSD) sales dropped 20% to 5.4 million tons in the first nine months (July-March) of FY19, which “is more than a decade low”, Topline Securities commented.

“Motor spirit (petrol) growth remained limited to 1% (to 5.52 million tons), almost a nine-year low on account of decline in car and bike sales by 4.5% and 5% respectively in first eight months of FY19,” it said.

Cumulatively, the petroleum oil sales were down 27% in the nine months under review, dragged down by a 60% decline in furnace oil (FO) sales and 20% drop in HSD sales.

“The decline in FO sales continues due to its low usage in power generation after commencement of new RLNG (re-gasified liquefied natural gas) and coal-based power plants,” it said.

HSD sales remained on the lower side on the back of slowdown in economy as indicated by 7MFY19 large-scale manufacturing (LSM) decline of 2.3% against 7% growth in 7MFY18. Furthermore, continuous smuggling from Iran could also be attributed to this decline, it added.

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

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