Demand for petroleum oil products (POL) surged by a surprising 8% to 1.44 million tonnes in January against a downward trend in the short to medium-run, as industrial and commercial consumers apparently hoarded the products before the much-anticipated hike in their price.
The demand, however, declined by a staggering 20% in the month of January, compared to the same month of last year (January 2022). Cumulatively, in the first seven-month (Jul-Jan) of the current fiscal year, the products’ sales have also declined by 19%.
Speaking to the Express Tribune, Arif Habib Limited Head of Research Tahir Abbas said, “The demand for the products is expected to further slowdown in the wake of a partial shutdown of industries and low reliance on oil to produce electricity.”
“The sale of petroleum products surged on advance purchasing in January,” he stated.
The latest hike of Rs35/litre in the price of both petrol and diesel, that came into effect on January 29, will further dampen demand. Besides, a further jump in the product prices cannot be ruled out considering the government may increase the petroleum development levy (PDL), raise the products’ transportation charges and impose a sales tax of 17% to resume the International Monetary Fund’s (IMF) loan programme.
“The sales may cumulatively drop by 20-22% in FY23, compared to the previous year (FY22),” said Abbas.
Published in The Express Tribune, February 2nd, 2023.
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