Sale of oil products down 31%

Dealers lift petroleum stocks from OMCs following price hike speculations

ISLAMABAD:

Despite discounts offered by the oil industry, the sale of petroleum products has seen a massive dip of 31% in the month of August, 2022.

Oil industry sources said that owing to speculation regarding increase in prices from September onwards, dealers lifted stocks of petroleum products from Oil Marketing Companies (OMCs).

Oil companies had offered discounts on sale of petroleum products to fetch cash to retire Letter of Credits (LCs) for the import of petroleum products.

Despite all efforts, the sale of petroleum products remained low.

Oil industry officials say that they did not anticipate any rise in the demand of petroleum products till November this year due to damage of rice, cotton and other crops following the havoc caused by floods in the province of Sindh.

As soon as the sowing of wheat starts, in November this year, there will be some rise in demand for petroleum products, they said. Further revealing that the oil industry had initially faced some problems in supplying petroleum products to some areas of Balochistan and Gilgit.

Earlier, the oil industry had faced problems in securing Letter of Credits (LCs) for oil imports due to the looming threat of default in payments. International banks had been charging 8% confirmation charges to confirm LCs of Pakistani oil companies to import petroleum products. They confirmed, however, that the situation had normalised since international banks were now charging around 5% confirmation charges of LCs.

The oil industry experienced a decline in sale of petrol by 13% whereas sale of high-speed diesel declined by 22% in the period under review.

The oil industry had projected actual demand for high-speed diesel at 636,500 metric tons, but was only able to sell 495,581 metric tons, reflecting a reduction of 22% in sales.

Likewise, projected sales of petrol stood at 734,800 metric tons, whereas only 637,719 metric tons were sold, reflecting a decline of 13% during the month of August, 2022.

Pakistan State Oil (PSO), the largest oil importer in the country, suffered a decline in sale of high-speed diesel by 27%. The state-run oil giant’s sale of petrol also went down by 10% during the month of August, 2022. While the company had projected a demand for high-speed diesel at 320,000 metric tons, the company’s actual sale of diesel stood at 232,120 metric tons. In the case of petrol, PSO had estimated demand at 322,000 metric tons against an actual sale of 288,748 metric tons.

The sale of high-speed diesel for Shell Pakistan Limited also dropped by 27% to 38,916 metric tons against the targeted 52,000 metric tons. The company had projected demand for petrol at 80,000 metric tons but sold only 68,593 metric tons of petrol, reflecting a decline of 14%.

Attock Petroleum Limited (APL) sold 42,172 metric tons of high-speed diesel against a projection of 53,000 metric tons, also reflecting a decline of 20%. APL’s sale of petrol was 54,956 metric tons against a projected demand of 60,000 metric tons.

Cnergyico oil marketing company, on the other hand, recorded a rise in sale of high-speed diesel of 33% during the month of August, 2022. The sale of high-speed diesel stood at 23,996 metric tons against the projected demand of 18,000 metric tons. With regards to petrol, however, the company too faced a record dip of 49%. The sale of petrol stood at 8,480 metric tons against a projected demand of 16,500 metric tons.­­

Published in The Express Tribune, September 3^rd, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.