August oil sales up 6% on weak base effect – Markets

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KARACHI: Oil sales in Pakistan in August 2022 saw a 6% increase on a monthly basis (MoM) to 1.5 million tonnes after suffering a consecutive decline for the past 3 months.

The main reasons for the increase in oil sales include a weak basis due to the decrease in the number of working days in July 2022 during the Eid-ul-Adha holiday. Despite rising 6% month-on-month, oil sales remained below their monthly average for the past 6 months, said Saad Ziker of Topline Securities.

Motor gasoline (MOGAS) and high-speed diesel (HSD) sales increased 7% per month and 12% per month to 638,000 tons and 496,000 tons, respectively. However, FO sales were down 7% on MoM.

Compared to last year, oil sales in Pakistan recorded a 22% year-on-year (YoY) decline in August 2022, due to double-digit declines in all major products tankers; MOGAS sales were down 26% YoY, HSD down 26% YoY and FO down 35% YoY.

The decline in oil sales year-on-year is mainly due to higher fuel prices, lower car sales, lower transportation activities and the monsoon/flood season which led to lower oil sales. demand for petroleum products, said Saad Ziker.

Among listed entities, sales of Pakistan State Oil (PSO) recorded a 4% increase month on month, while they fell 23% year on year to 791,000 tons. The OSP market share remained the same as last month at 52% compared to 53% in the same month last year.

Attock Petroleum (APL) and Shell Pakistan (SHEL) also recorded an increase in oil sales of 8% on MoM and 10% on MoM to 154,000 tons and 110,000 tons, respectively.

In the first two months of FY22-23, oil sales were down 24% year-on-year to 2.97 million tonnes, mainly due to the general slowdown in the economy and higher prices fuel.

“We expect FY23 oil sales to fall 20-25% year-over-year, primarily due to (i) weaker agriculture growth, (ii) lower auto sales and (iii) an increase in oil prices.”

Copyright Business Recorder, 2022

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