INP-WealthPk
Increased prices push down oil sales by 26% in July 2022
August 12, 2022
By Muhammad Mudassar
ISLAMABAD, Aug 12 (INP-WealthPK): Pakistan’s oil sales reduced by 26% in July 2022 as compared to the previous month.
In terms of quantity, 1.44 million tons oil was sold in July, According to Oil Companies Advisory Council (OCAC).
One of the main factors that have contributed to this reduction in demand is increase in oil prices. During the period from June 1 to July15, the price of gasoline and diesel increased by 28% and 35.5%, respectively.
The price of oil over time
|
Date |
Premier Euro 5 |
Hi-Cetane Diesel Euro 5 |
|
01-June |
179.86 |
174.15 |
|
03-June |
209.86 |
204.15 |
|
16-June |
233.89 |
263.31 |
|
01-Jule |
248.74 |
276.54 |
|
15-July |
230.24 |
236 |
|
Percentage increase from 01 June to 15 July |
28.0107 |
35.5154 |
Source: Pakistan State Oil (PSO)
Oil is primarily consumed by transportation sector. The presence of traffic on the roads has decreased significantly due to the monsoon season in the country and the Eid holidays.
Due to rice cultivation, it is expected that oil demand will increase, but since there was a lot of rain, it did not put too much pressure on oil demand.
Renowned economist Dr. Abid Qayyum Sulehri told media that the International Monetary Fund (IMF) wants to increase the petroleum development levy in Pakistan in order to reduce circular debt.
“There is no doubt that the price of petrol in the international market has fallen in July, but the petrol that we are using this month was purchased one to two months ago. Therefore, the relief will be granted after a certain period of time,” he explained.
High-speed diesel (HSD) sales reduced by 38 percent on month-over-month (MoM) basis to 444,000 tons, motor gasoline (MOGAS) sales declined by 15% to 594,000 tons and furnace oil (FO) sales dipped by 23% to 350,000 tons.
As compared to last year, Pakistan oil sales recorded a 26% year-over-year (YoY) decline in July 2022, which is due to a drop in MOGAS and HSD sales by 27% on YoY basis, and 38% on YoY basis, respectively. Excluding FO, oil sales were down by 31% on YoY basis, and 26% on MoM basis in July 2022 to 1.1 million tons.
According to Saad Ziker Topline Securities, it is expected that oil sales will drop by 15-20% on YoY basis in FY23, mainly due to low growth estimated in the agriculture sector, likely decline in auto sales because of higher prices, and increase in petroleum prices.
Credit: Independent News Pakistan-WealthPk
