Petroleum Sales Plunge By 46% As Inflation Bites

 

A Sharp increase in the inflation rate has also affected already dwindling petroleum sales in Pakistan. Reports have informed that year-on-year (YoY) sales of petroleum products decline by 46% to 1.71 million tonnes. 

Last month, 72,000 tonnes of furnace oil (FO) were sold against 461,000 tonnes in the corresponding period of last year. Coming to month-over-month (MoM), sales of furnace oil – decreased by 16%.

Reports have posted a decline of 25% in petrol sales (YoY) in April 2023, selling 580,000 tonnes. Whilst month-over-month (MoM) sales have seen a jump of 4%. Furthermore, Petrol sales dropped by 17% in 10MFY23 to 6.173 million tonnes.

Meanwhile, year-on-year (YoY) sales of diesel witnessed a slump of 50% selling 461,000 tonnes in April 2023 compared to 919,000 tonnes sold in April’22. In contrast, diesel month-on-month (MoM) sales are inched up by 16%. 

An Analyst stated that the decline in petroleum sales is triggered in the face of a downfall in furnace oil (FO) and diesel sales charts.

He further informed, “During 10MFY23, oil sales were down due to economic slowdown with a decline visible in all major petroleum products. Higher inflationary environments, particularly the prices of petrol and diesel have had a major impact on demand.”

“The widespread availability of Iranian diesel, especially in the country’s southern region, is hurting diesel offtake due to a significant price differential between Pakistani and Iranian diesel,” he added.

Pakistan Losing Billions Per Month

As per media reports, the country’s melting economy is bearing a hefty revenue loss of Rs. 10.2 billion per month in the face of smuggled Iranian diesel. No law enforcement from authorities like the Federal Board of Revenue (FBR) is held responsible for the considerable dent in the country’s dwindling economic graphs.

The oil Gas and Regulatory Authority (OGRA) has reported a substantial loss in legal sales revealed by authorized Oil Marketing Companies (OMCs). The average consumption of diesel was 23,000-30,000 tons per day during March-June last year, which, as per sales since February 2023, has now decreased to 15,000 tons per day. Alarming enough, the slump continues to date.