Oil sales grow by five percent in First half FY16
KARACHI: The sales of Oil Marketing Companies (OMCs) showed strong growth in first half of 2015-16, increasing by 5% to 11 million tonnes as compared to 1% decline last year on the rising consumption in transport sector and its controlled prices at retail level.
According to energy analysts, 5% growth is higher than last three years average growth of 3% during the same period. The increased demand is because of high growth in white oil (motor gasoline and diesel), which is led by declining oil prices, growing auto sales and better macros.
Motor gasoline (Mogas) sales outperformed, growing by 33% to 2.7 million tonnes in the first half of FY16 while sales of high-speed diesel (HSD) grew by 4% to 3.6 million tonnes.
Furnace oil (FO) sales remained under pressure due to declining reliance on FO-based power plants in the country. FO sales were down 8% to 4.1 million tonnes in the period under review.
Amongst the top oil marketing companies (OMC), Pakistan State Oil (PSO)’s oil sales grew by 4% to 6.1 million tonnes mainly driven by Mogas sales, up 26%. Shell Pakistan (SHEL) and Hascol Petroleum (HASCOL) registered growth of 12% and 21% respectively.
APL was the only top OMC that registered decline of 15% mainly due to sharp drop in FO sales (37% of total APL sales), which were down by 38%.
OMC sales will continue to growth due to increasing demand of retail products amid lower oil prices on the improving economic activity and increasing car sales.
The sales of Mogas and HSD sales will remain firm going forward. Further, the China-Pakistan Economic Corridor (CPEC) related activity will assist HSD sales to grow despite a slowdown in agricultural sector.