Oil sales fall 3% in fiscal 2011

PSO loses ground; Shell and Attock pick up the pieces.

KARACHI:

Despite the increasing energy needs, the country’s oil consumption dropped by 3.1 per cent to 19.6 million tons in the outgoing financial year compared with 20.3 million tons last year.

Catastrophic floods and subdued trade activity adversely impacted oil sales in the first half of fiscal 2011 while the second half was marred by product unavailability, according to a Topline Securities research note. Subsequently, sales of furnace oil and high speed diesel that cumulatively contribute 85 per cent to oil consumption, declined by 2.2 per cent and 7.3 per cent, respectively.

The first half of the financial year was dominated by the floods that forced temporary closure of few big independent power producers and reduced trade activities, says the note. The second half was marked with product unavailability on account of reduced imports from oil marketing companies in April due to liquidity crunch and lower operation of refineries in May, adds the note.

Company-wise  market share

Among individual companies, Pakistan State Oil (PSO) was the major victim as sales declined by 10.6 per cent in fiscal 2011. High exposure to circular debt strained PSO’s liquidity position and affected company’s product supply, hence reducing its market share, says the note.

The lost ground of PSO was gained by Shell and Attock Petroleum, whose sales have increased by 10.3 per cent and 21.2 per cent to stand at 2.6 million and 1.4 million tons, respectively.

Published in The Express Tribune, July 7^th, 2011.