With the exception of the COVID year FY20, when the overall amount of oil industry products sold was at about 16.3 million tonnes, Pakistan’s oil consumption fell to its lowest level since FY07, totaling only 16.6 million tonnes for the entire year. Labeling FY23 as one of the worst years in the country’s history for petroleum sales would not be an exaggeration, as total volumetric sales have never been less than 18 million tonnes since the data is available.
The two years with the lowest oil sales were FY20 and FY23, with the former being hurt by the destruction of pandemic demand and the latter being the result of a challenging economic environment in the country. Overall, oil sales for FY23 decreased by 26% year over year, with furnace oil volumes experiencing the largest loss, at 49%, followed by high-speed diesel at 28%, and motor gasoline at 17%.
According to OCAC’s most recent data, the monthly petroleum sales in June–23 decreased by 31% year–over–year. This decline was caused by rising petroleum product prices, the country’s economic unrest, a decreased reliance on boiler oil for power generation, and an increase in the smuggling of retail goods across the Iranian border.
The reduction in petroleum sales during the month was primarily caused by falls in the use of furnace oil (down 78%), diesel (down 24%), and gasoline (down 9%), all of which were down year over year. On a month-over-month basis, there was a 4 percent increase, which may be attributed to summer’s higher motor fuel sales and hot weather’s higher furnace oil usage. Diesel volumes, however, remained unchanged despite rising prices.
It appears that oil consumption would recover slowly in FY24 at the current rate, with high inflation and pressure on demand being the main obstacles, followed by the extended import ban on the auto industry.
Source: Business Recorder
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