Oil sales drop 17% as economy slows down
Total sales stand at 10.68m tons; power plants shift to RLNG
PHOTO: REUTERS
KARACHI:
Petroleum oil sales dropped 17% to 10.68 million tons in seven months ended July 2019 due to deceleration in economic activities and shift to imported gas - re-gasified liquefied natural gas (RLNG).
Sales of oil marketing companies stood at 12.89 million tons in the same period of previous year, according to data compiled and reported by Shajar Capital.
Sale of furnace oil plunged 42% to 1.86 million tons in Jan-Jul 2019 compared to 3.23 million tons in the corresponding period of previous year. It was followed by high-speed diesel, whose sales decreased 17% to 4.05 million tons compared to 4.89 million tons in the previous year.
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Growth in sale of petrol also slowed down significantly. It improved just 3% to 4.34 million tons compared to 4.23 million tons last year, the brokerage house said.
“Economic slowdown and shift to RLNG in the power sector caused the drop in sales,” Topline Securities’ analyst Umair Naseer said in remarks made to The Express Tribune.
Accordingly, the sale of furnace oil, which remained a major fuel for power production in the past three decades, suffered a massive drop during the period under review, he said.
Furnace oil sales will continue to drop going forward as the government has decided to phase out oil-based power production gradually.
High-speed diesel remained a major fuel used in the transportation sector, including for the movement of industrial goods. Therefore, the deceleration in economic activities put the transportation sector in low gear and squeezed diesel sales, he said.
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Industrial and agriculture sectors also use petroleum oil products. The dismal performance of the two sectors may have impacted oil sales as well.
A drop in sales of cars and hike in petrol prices caused the slowdown in petrol sales, he said.
Sales up month-on-month
Sales of petroleum products increased 13% to 1.53 million tons in July alone compared to 1.35 million tons in June following increase in electricity demand forced the government to switch on oil-fired power plants as well in the month.
Oil marketing companies’ sales in July 2019 increased primarily due to a massive 22% surge in diesel sales and 6% growth in furnace oil sales. “This rise is explained by an increase in consumption by power plants to cope with increased power outages,” Shajar Capital said.
Company-wise sales
In terms of individual companies, Pakistan State Oil (PSO), in the first month of FY20, posted a 17% increase in its total sales volume on a month-on-month basis, which was recorded at 751,000 tons.
Attock Petroleum Limited’s (APL) sales remained flat at 153,064 tons in July due to drop in sales of petrol and diesel, but furnace oil sales improved.
Hascol registered 2% fall in its total sales volume in July 2019, which was largely contributed by a dip in the company’s petrol and furnace oil sales.
Published in The Express Tribune, August 3rd, 2019.
Petroleum oil sales dropped 17% to 10.68 million tons in seven months ended July 2019 due to deceleration in economic activities and shift to imported gas - re-gasified liquefied natural gas (RLNG).
Sales of oil marketing companies stood at 12.89 million tons in the same period of previous year, according to data compiled and reported by Shajar Capital.
Sale of furnace oil plunged 42% to 1.86 million tons in Jan-Jul 2019 compared to 3.23 million tons in the corresponding period of previous year. It was followed by high-speed diesel, whose sales decreased 17% to 4.05 million tons compared to 4.89 million tons in the previous year.
Govt silently increases petrol, diesel prices
Growth in sale of petrol also slowed down significantly. It improved just 3% to 4.34 million tons compared to 4.23 million tons last year, the brokerage house said.
“Economic slowdown and shift to RLNG in the power sector caused the drop in sales,” Topline Securities’ analyst Umair Naseer said in remarks made to The Express Tribune.
Accordingly, the sale of furnace oil, which remained a major fuel for power production in the past three decades, suffered a massive drop during the period under review, he said.
Furnace oil sales will continue to drop going forward as the government has decided to phase out oil-based power production gradually.
High-speed diesel remained a major fuel used in the transportation sector, including for the movement of industrial goods. Therefore, the deceleration in economic activities put the transportation sector in low gear and squeezed diesel sales, he said.
Oil prices rise for fifth day after US stocks decline
Industrial and agriculture sectors also use petroleum oil products. The dismal performance of the two sectors may have impacted oil sales as well.
A drop in sales of cars and hike in petrol prices caused the slowdown in petrol sales, he said.
Sales up month-on-month
Sales of petroleum products increased 13% to 1.53 million tons in July alone compared to 1.35 million tons in June following increase in electricity demand forced the government to switch on oil-fired power plants as well in the month.
Oil marketing companies’ sales in July 2019 increased primarily due to a massive 22% surge in diesel sales and 6% growth in furnace oil sales. “This rise is explained by an increase in consumption by power plants to cope with increased power outages,” Shajar Capital said.
Company-wise sales
In terms of individual companies, Pakistan State Oil (PSO), in the first month of FY20, posted a 17% increase in its total sales volume on a month-on-month basis, which was recorded at 751,000 tons.
Attock Petroleum Limited’s (APL) sales remained flat at 153,064 tons in July due to drop in sales of petrol and diesel, but furnace oil sales improved.
Hascol registered 2% fall in its total sales volume in July 2019, which was largely contributed by a dip in the company’s petrol and furnace oil sales.
Published in The Express Tribune, August 3rd, 2019.