Petroleum sales record the highest decline of 14% in December 2022

 Pakistan oil sales in December 2022 decreased by 14% MoM to 1.34 million tons, mainly due to a seasonal trend of slowdown in December, lower demand for furnace oil for power generation, and an overall slowdown in the economy.

 This is the lowest monthly sales number since the first COVID lockdown period of February–April 2020. FO, HSD, and MS all fell by 10/22% and 8%, respectively, MoM.Furnace Oil Prices in Pakistan down up to Rs 15,000 per ton

 Oil sales recorded an 11% YoY decline in December 2022 due to falling in all major petroleum products; MS was down 11% YoY, HSD was down 15% YoY, and FO was down 3% YoY.

 The YoY drop in oil sales is primarily due to 1) higher fuel prices, 2) an overall reduction in economic activity, and 3) lower FO-based power generation.

 Among the listed entities, Pakistan State Oil (PSO) posted a decrease of 23% MoM and 9% YoY to 626k tons. PSO’s market share slightly improved to 47% in Dec-2022 compared to 46% in Dec-2021.

 Attock Petroleum’s (APL) sales declined 9% MoM and 16% YoY.

While Shell Pakistan (SHEL) sales decreased by 4% MoM and by 18% YoY. APL and SHEL market shares for December 2022 were 9% and 8%, respectively, compared to 10% and 9% shares in December 2021.

 During 1HFY23, oil sales are down 19% year over year to 9.03 million tons due to an economic slowdown, with a decline visible in all major petroleum products. Higher MS and HSD prices have also had a significant impact on demand.

 Product wise FO and HSD have witnessed the most major drop with a decline of 24% and 23% YoY respectively, while MS sales declined by 15% YoY in 1HFY23.

 We expect FY23 oil sales to drop by 20% YoY, mainly due to the overall slowdown in the economy. Local prices are set to remain elevated due to lower government fiscal space, which will continue to dent demand, Topline Research said in a report.