Islamabad March 1 2024: Furnace oil sales hit all-time low in Pakistan on reduced demand from Power sector during the month of February 2024, according to data released by OCAC.
Overall sales of petroleum products in February 2024 experienced a 19 percent decrease compared to the previous month, reaching their lowest in last five months.
This decline was primarily attributed to record high prices and decreased demand from the power sector, as indicated by data shared by OCAC.
Electricity generation on Furnace oil declined 42 percent to 2,104 GWh in a period from July 2023 to January 2024, as per data released by NEPRA a few days ago.
Electricity generation cost PKR 35.44 per unit on furnace oil during January 2024 which is 45 percent higher than that of imported RLNG cost and 68 percent more costly than imported coal.
During this period, Attock Petroleum (APL) recorded the most significant decline with a 26 percent decrease in sales, followed by a 14 percent drop in sales for Pakistan State Oil (PSO) and an 9 percent reduction in sales volumes for Shell Pakistan (SHELL).
On the contrary to industry trend Hascol Petroleum sales increased by 17 percent as compared to previous month due to higher HSD sales growth.
Furthermore, when compared to the same period in the previous year, petroleum sales saw a drop of 8 percent. This decline was linked to the increasing prices of oil and a decrease in demand. In February 2024, the government raised petroleum product prices in response to the rising international market prices for these products.
The average prices of Motor Spirit (MS) experienced a noteworthy increase of 4.03 percent, while High-Speed Diesel (HSD) prices rose by 2.16 percent during February 2024.
Sales of Motor Spirit (MS) for February 2024 decreased by 12 percent when compared to the previous month, totaling 0.54 million tons.
This decline was driven by expectations of further price increases, and year-on-year MS sales also saw a 1 percent decrease.
A similar pattern was observed in the sales of High-Speed Diesel (HSD), which declined by 13 percent on a month-on-month basis, reaching 0.45 million tons in February 2024. This decrease was primarily due to reduced demand from the transportation and agriculture sectors, with HSD sales also dropping by 7 percent compared to the same period in the previous year.
Furthermore, sales of Furnace oil (FO) experienced a significant 73 percent month-on-month decline in February 2024, falling to 0.05 million tons. This decline was attributed to reduced demand from power producers, marking a substantial 58 percent decrease compared to February 2023 sales.
In addition, petroleum sales in the first eight months of 2024 witnessed a 13 percent decline, amounting to 10.18 million tons when compared to sales of 11.69 million tons in the same period the previous year.
