LAHORE - Oil sales declined by 18 percent annually to 1.5 million tons in February mainly on the back of sharp drop in FO sales which declined by 26 percent to 4.7m tons amid lower demand from power sector.

Motor gasoline (MOGAS) sales during the month increased by 4 percent to 0.5mn tons whereas high speed diesel (HSD) sales were down 3 percent to 0.6mn tons. Sales of these retail fuel products including MOGAS and HSD remained lower than expectations as higher pump prices (+ 18 percent YoY) had a profound impact on their sales.

Hascol Petroleum (HASCOL) continued to outperform market as its market share stood at 14 percent in Feb 2018 vs 9 percent in same period last year. Pakistan State Oil (PSO) and Shell Pakistan (SHEL) remained laggards as their market shares dropped to 41 percent (-11 percent YoY) and 9 percent (-1 percent YoY), respectively. PSO with the highest share of FO sales is mainly affected from lower FO demand amid increased RLNG imports in Pakistan.

In 8MFY18, oil sales declined by 3 percent to 16.5m tons as drop in FO sales had a toll on overall sales volume. Oil sales excluding FO sales were up 11 percent. Experts now anticipate oil sales to clock in at 22.4m tons in FY18 (previous estimate of 24m tons), which will be 14 percent lower compared to FY17 oil sales of 26.1m tons.

Experts said that the decline for Feb 2018 is mainly attributable to decline in FO volumes of 37.2/54.5 percent MoM/YoY on the back of government’s resolve to substitute FO based power generation while resumption of hydel power plants must have also played a role.

 Sale of retail fuels (MS+HSD) posted a growth of 0.4 percent YoY for Feb’18, however a sequential decline of 16.4  percent was witnessed in HSD on the back of decline in construction activity.