Sales of petroleum products in June 2023 were reported at 1.3 million tons, down 31%YoY, however, up by 4%MoM. The increase in volume was mainly driven by increase in Motor Spirit (MS) by 7%MoM and furnace oil (FO) by 10%MoM. HSD sales however, remained flat.
MS sales for the month under review increased by 7%MoM to 0.64 million tons. This was mainly due to 1) seasonal effect of holidays and summer vacations and 2) slightly lower prices. FO sales increased to 100,000 tons, up 10%MoM, mainly due to the higher offtake by power generation plants.
Total oil sales excluding furnace oil clocked in at 1.2 million tons in June 2023, down 16%YoY but up 3%MoM.
Among listed entities, Pakistan State Oil (PSO) sales for the month declined by 38%YoY to 646,000 tons. This was due to lower FO sales, down 97%YoY followed by HSD down 22% YoY.
Shell Pakistan (SHELL) sales for the month decreased by 37%YoY to 95,000 tons. This was due to 53%YoY decline in HSD sales and 20%YoY decline in MS sales.
Attock Petroleum (APL) sales declined by 26% YoY to 150,000 tons. This was due to 46%YoY decline in FO, 21% in HSD and 7% in MS.
PSO market share for June 2023 slipped to 48%, from 53% in June 2022 and 46% in May 2023. SHELL share for declined to 7.1%, from 7.9% in June 2022 and 6.9% in May 2023. APL share for June 2023 was reported at 11.2% against 10.4% in June 2022 and 9.5% in May 2023.
For 4QFY23, OMC sales stood at 3.8mn tons which was an increase of 1% QoQ and a decline of 40% compared to 4QFY22. During FY23, oil sales are down 27%YoY to 16.6 million tons. Higher petroleum product prices and overall slowdown in economy have made a dent on demand.
This was the lowest OMC sales number since FY06, excluding the COVID year of FY20. In FY06 OMC sales were recorded at 14.6 million tons, according to Pakistan Energy Yearbook.
Product wise FO and HSD have witnessed major drop with a decline of 49%YoY and 28%YoY respectively, while MS sales declined by 17%YoY in FY23.
HSD and MS sales declined due to higher product prices in FY23. FO declined due to lower demand from power generation.
HSD sale price was reported at an average of Rs255/liter in FY23 as compared to an average price of Rs145/liter in FY22. This is an increase of 76% YoY.
MS sale price stood at an average of Rs245/liter in FY23 compared to average price of Rs148/liter in FY22. This is an increase of 66%YoY.
OMC sales (Excluding Furnace Oil) stood at 14.5 million tons in FY23 which was a decline of 22%YoY. This was the lowest number since FY15 (Ex-COVID).
For FY23, PSO market share declined slightly to 50% as compared to 51% in FY22. Slight decline in PSO market share was mainly due to FO, with sales declining by 64% as against an industry decline of 49%.
While SHEL market share was at 7.6% as compared to 7.7% in FY22 and APL share was reported at 9.6% as against 9.3% in FY22.
Export of furnace oil
Exports have so far gone to Singapore and the United Arab Emirates this year.
Pak-Arab Refinery (PARCO) has offered furnace oil for July loading in its latest tender, underlining an ongoing shift in market dynamics as the South Asian country turned to exporting instead of importing fuel oil this summer.
The refinery has offered 50,000 tons of high-sulphur furnace oil (HSFO) with maximum 3.5% sulphur content, for loading at Karachi port between July 15 and 17.
The tender closed on July 05, Parco had previously closed an HSFO sales tender in May this year.
Imports of fuel oil into Pakistan slumped in the second quarter this year as companies resorted to burning more coal for power generation due to its cheaper cost and easy availability.
Monthly imports had hit a four-year high in the second quarter last year.
The country’s fuel oil exports have trended higher in 2023 so far compared to 2022, a total of 340,000 tons in Q2CY2023. It did not export any fuel in the same quarter last year, data from shipping analytics firm Kpler showed.
The country typically imports fuel oil from the Middle East.
The export trend could continue in the coming months as the peak summer demand season is already retreating, with refineries seeking to clear inventories, trade sources said.