Petroleum consumption falls to eight-month low
Petroleum products’ consumption dropped 20% to an eight-month low of 1.38 million tons in September, led by furnace oil and high speed diesel that cumulatively contribute 75% to the petroleum basket.
The decline was led by furnace oil sales falling 37% to 10-month low and high speed diesel dropping 7% to 12-month low, according to an InvestCap research note.
The decline can partly be attributed to continuous spells of rainfalls followed by floods in Sindh, says the note.
Pakistan State Oil (PSO) with huge 29% decline on a monthly basis lost its market share by significant 740 basis points to 59.3%.Shell managed to capture the lost market share of PSO to improve its share by 320 basis points to 11.6% in September. Attock Petroleum Limited continued gaining market share, this time by 110 basis points to total of 9.1%.
Impact of ban on export to Afghanistan
As far as export ban of petroleum products to Afghanistan is concerned, keeping portion of the products and their respective share in gross profit margins, impact on the oil marketing companies ranges between 3% and 14%.
Shell and Attock Petroleum seem to be affected the most as 13.5% and 7% of their petroleum products were exported as per last year’s volume figures, says the note.
Since the share in gross profits is minimal for all the three oil marketing companies, change in earnings per share may be the greatest for Shell followed by APL and the least for PSO, adds the note.
Published in The Express Tribune, October 15th, 2011.
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