Hi Everyone! I hope you are all doing well. Welcome back to another blog. This article will discuss the topic in detail “Massive Dip in Petroleum Sales Hits PSO, Shell, and Attock Hard”. A massive dip in petroleum sales is causing a significant setback for the petroleum industry in Pakistan, with top oil marketing companies such as Pakistan State Oil (PSO), Shell, and Attock Petroleum Limited being hit hard. This article will explore the reasons behind the decline in sales and the impact it is having on these companies.
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According to data released by Arif Habib Limited (AHL), Pakistan experienced a considerable YoY decline in petroleum sales, with a drop of 46 percent, as the sales volume for April 2023 reached 1.17 million tons compared to 2.18 million tons in April 2022. In the 10MFY23 period (July-April 2022-23), the total sales volume also decreased by 24 percent YoY, reaching 13.97 million tons.
During the month of Apr’23 the OMC industry sales declined by 46% YoY, while witnessing an increase of 6% MoM to 1.17mn tons. With this, the total sales arrived at 13.97mn tons during 10MFY23, down by 24% YoY.@Pakstockexgltd#OGRA #PSO #APL #SHEL #AHL pic.twitter.com/WNDB0bjdJB
— Arif Habib Limited (@ArifHabibLtd) May 3, 2023
In April, there was an 83 percent year-on-year drop in sales of Furnace Oil (FO) and a 50 percent year-on-year decrease in High-Speed Diesel (HSD) offtake. The sales of Motor Spirit (MS) also experienced a decline of 24 percent year-on-year.
The overall decrease in diesel sales across all markets indicates that transportation and industrial activities experienced a decline due to the lengthy Eid holidays and reduced work during Ramazan. Although smuggling activities persisted at the borders, they did not significantly increase, and therefore, the contribution of smuggled diesel/petrol to the local fuel utility remained ordinary. In terms of month-over-month (MoM) basis, the overall fuel sales exhibited a growth of 6 percent.
Figures of 10 Months
In FY23’s 10-month period, there was a 17 percent YoY decline in MS petrol sales, with sales reaching 6.17 million tons. HSD sales, on the other hand, experienced a 28 percent YoY decline, making it the second-largest decline. FO sales, on the other hand, experienced a YoY decline of 40 percent.
Sales based on Company
In April 2023, Pakistan State Oil (PSO) witnessed a YoY decline of 53 percent in sales. The company’s MS sales, which are under the purview of the government, reached 0.34 million tons and declined by 22 percent YoY. Similarly, HSD sales and FO sales suffered a YoY decline of 52 percent and 98 percent, respectively. PSO’s overall sales volume during 10MFY23 declined by 25 percent YoY, amounting to 7.06 million tons.
In April 2023, Attock Petroleum Ltd. (APL) experienced a substantial 31 percent decline in sales compared to the same period last year. This was mainly due to a decrease in sales of Fuel Oil (FO), High-Speed Diesel (HSD), and Motor Spirit (MS) by 35 percent, 44 percent, and 14 percent, respectively. From July to April in the fiscal year 2023, overall sales were impacted by a significant 22 percent reduction as a result of sluggish demand for MS, HSD, and FO.
In April 2023, Shell experienced a 43 percent year-on-year decline in offtake due to a 60 percent drop in sales of HSD and a 28 percent drop in sales of MS. Over the first 10 months of FY23, Shell’s overall offtake decreased by 25 percent year-on-year, primarily driven by low sales of MS and HSD.
In April, HASCOL experienced a huge 308 percent year-on-year increase in sales. During the same period, MS sales rose by 419 percent year-on-year, reaching 0.01 million tons, and HSD sales grew by 137 percent year-on-year. HASCOL’s sales for the 10 months ending on April 30th, 2022-23 increased by 19 percent year-on-year, totaling 0.29 million tons.
The overall YoY drop in oil sales for FY23 could be around 25 percent, primarily attributable to the economic slowdown. The government is unable to provide any relief to consumers. The persistently high inflation is also contributing to the problem. As a result, the demand for oil is expected to remain constrained.
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