The sale of petroleum products has seen a 24% decline in October 2023 as compared to the same period last month of November and 17% fall against the same period last year, says oil companies data.
As per the details, POL sales witnessed a (year on year) YoY decline for the 16th consecutive month of 24% (↑19% MoM – month on month) to 1.3mn tons in Oct’23 as sales fell across the board given record high retail prices of MS/HSD, increased inflow of Iranian fuel and economic slowdown. During 4MFY24, total sales clocked-in at 5.1mn tons (↓17% YoY). Product-wise breakdown reveals a decline of 15/21/74% YoY in MS/HSD/FO sales respectively during Oct’23. Company-wise analysis depicts that PSO, APL, SHEL volumes slipped by 26, 10 and 30% respectively (YoY) during Oct’23.
Impact of Oil Price and Sale
Sales declined across the board: Domestic petroleum sales (ex-non Energy) declined 24% YoY in Oct’23. While the surge of 19% was witnessed sequentially given a decline in petroleum prices in 2nd half of the month.
Product-wise analysis reveals that petrol and high-speed diesel sales decreased by 15 and 21% respectively YoY (and went up by 12 and 42% MoM) due to (1) elevated petrol and diesel retail prices (avg. of Rs303/310/liter respectively in October 2023), (2) increased inflow of Iranian fuel through informal channels and (3) continuing economic slowdown amid all-time high-interest rates and high inflation.
In the black oil segment, FO sales clocked in at 54K tons during Oct’23, down 74% YoY (↓37% MoM) depicting lower demand from power producers amid higher proportion of RLNG, coal, nuclear and hydel generation given that cost of generating electricity on FO at ~Rs37.0/unit was highest compared to all other fuels (avg. fuel price: Rs7.6/unit).
Company wise Sale Impact
For companies – PSO: In Oct’23, the sales volume of PSO clocked in at 628K tons, ↓26% YoY. MS/HSD (Petrol/diesel) sales volume clocked in at 248/315K tons ↓14/20% YoY in Oct’23. Whereas, FO sales fell 95% YoY during Oct’23 amid lower demand from the power sector. Sequentially, sales surged 23% given 4/52% increase in MS/HSD whereas FO was down 55%.
Overall, PSO’s market share declined 1.5ppts YoY to 49.7%. Market share of MS/HSD (Petrol/diesel) increased by 0.1/1ppts YoY to 43/56% whereas FO market share fell by 44ppts to 10% in Oct’23.
The Attock Petroleum Limited (APL) recorded an overall decline of 10% YoY (↑1% MoM) during Oct’23 as its petroleum sales clocked-in at 124K tons.
Product wise analysis reveals that sales of MS/HSD (Petrol/diesel) were down/up 1/6% YoY (↑8/13% MoM) in Oct’23 while FO sales decreased 53% YoY (↓39% MoM). However, APL’s market share in MS/HSD/FO was up 1/2/13ppts YoY to 9/9/29% in Oct’23.
The famous company SHEL saw during Oct’23, volumes clocked-in at 90K tons, ↓30% YoY (↑12% MoM). MS/HSD sales declined 26/36% YoY (↑6/28% MoM). Whereas, SHEL’s market share of MS/HSD (Petrol/diesel) fell by by 1/1ppt to 9/6% in Oct’23.
Another company HASCOL’s sales grew 19% YoY (↑70% MoM) in Oct’23 to 41K tons driven by 53% YoY growth in MS sales. While HSD volumes fell 38% YoY in Oct’23. It’s market share of MS/HSD (Petrol/diesel) was up/down by 2/0.4ppts YoY to 6/1%.
Outlook on future Sale
Experts expect demand for petroleum products to remain muted amid elevated fuel prices and slowdown in economic activity despite favourbale base effect.
They also expect to have an outperform stance on the sector due to expected improvement in cashflows of PSO amid (1) increase in gas and electricity prices, and (2) expected resolution of circular debt given IMF program conditionality.
