Oil Marketing Companies (OMCs) in Pakistan achieved a milestone in November 2024, recording sales of 1.58 million tons—the highest monthly figure in 25 months. This robust performance marks a 15% year-on-year (YoY) growth, driven by lower petroleum prices, macroeconomic stabilization, and a crackdown on fuel smuggling. The strong demand for diesel, especially during seasonal agricultural activities, played a crucial role in this surge.
Diesel Leads the Charge
High-Speed Diesel (HSD) sales soared to a 30-month high of 788,000 tons, marking a 21% YoY and 15% month-on-month (MoM) increase. Analysts attribute this growth to a 15% reduction in diesel prices and the seasonal demand from Kharif crop harvesting. Stricter anti-smuggling measures also bolstered HSD consumption.
Petrol Sales Show Moderate Growth
Motor Spirit (MS), commonly known as petrol, recorded sales of 666,000 tons. This reflects a 17% YoY increase, though the figure remained flat compared to October 2024. Reduced mobility caused by heavy smog in Punjab tempered petrol demand.
Furnace Oil Declines Sharply
In contrast, Furnace Oil (FO) sales plummeted by 55% YoY and 36% MoM to just 37,000 tons. The sharp drop was attributed to decreased reliance on FO-based power plants as alternative energy sources gained prominence.
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Market Share Dynamics
Pakistan State Oil (PSO) maintained its dominance in November, expanding its market share to 51% from 47% in October. PSO’s HSD sales accounted for 54% of the market, driven by a 15% MoM increase. Attock Petroleum Limited (APL) saw an 8% YoY rise in total sales, with HSD sales increasing by 31%. Shell Pakistan also recorded a 12% YoY growth in sales, though its figures dipped slightly MoM.
Cumulative Performance for FY25
In the first five months of the fiscal year 2025, cumulative OMC sales reached 6.8 million tons, a 5% YoY increase. Analysts cite seasonal factors and anti-smuggling efforts as key contributors to this growth.
Challenges and Outlook
Despite the strong performance, challenges loom. Analysts warn of potential dips in sales during winter due to lower energy consumption, school holidays, and extreme smog in Punjab. However, lower petroleum prices are expected to soften the impact of these factors, providing some stability to the market.
OMCs in Pakistan have shown resilience in adapting to market conditions, with strategic measures like pricing adjustments and anti-smuggling initiatives playing a pivotal role in their success. This upward trajectory, particularly in diesel demand, underscores the importance of a stable macroeconomic environment for sustained growth.
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