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ISLAMABAD: Pakistan’s petroleum industry faced difficult times during the first half of the fiscal year 2024 (FY24), as evidenced by a notable 15% drop in petroleum product sales.
The numbers fell to 7.686 million metric tonnes from nine million metric tonnes during the same period in the previous fiscal year.
Particularly, sales of gasoline saw a sharp decline of 7%, falling from 3.83 million metric tonnes in FY23 to 3.57 million metric tonnes from July to December of 2023.
Even after the price dropped from Rs267.34 to Rs331.38 per litre in September 2023, the decline continued.
In September 2023, the cost of high-speed diesel (HSD) also dropped, from Rs329.18 to Rs276.21. Diesel sales, on the other hand, decreased by 6% to 3.16 million metric tonnes in the first half of FY23 from 3.36 million metric tonnes.
Sales of furnace oil (FO), which fell by an astounding 61% to 0.56 million metric tonnes from 1.45 million metric tonnes during, painted a dire picture.
In spite of this, FO sales unexpectedly increased by 54% in November 2023, reaching 82,000 metric tonnes from October 2023. This spike was linked to a decrease in hydel power generation during the winter, which forced a switch to FO-based power generation, as well as a shortage of RLNG and gas.
On the other hand, FO sales in December 2023 fell 36% year over year to 79,000 metric tonnes, indicating a 4% month over month decline.
The overall petroleum product sales declined by 7% from 1.33 million metric tonnes in December 2022 to 1.24 million metric tonnes in December 2023, indicating ongoing pressure.
Read More: Significant reduction expected in Petrol prices
With sales of 0.57 million metric tonnes of gasoline and 0.51 million metric tonnes of HSD in December 2023, down 8% and 2% from December 2022, respectively, these figures further contributed to the downturn.
The slowdown in the demand for gasoline and diesel is consistent with consumers’ cautious spending habits, which are shaped by worries about rising food prices and utility bills.
Customers are limiting their fuel purchases in accordance with their needs, even though the price of gasoline and diesel hasn’t decreased much.
Read More: Pakistan’s Petrol Price Review: 2023 Highlights and Inflation Impact
This trend is supported by the automotive industry as a whole, which saw a 50% decline in sales of cars, light commercial vehicles (LCVs), pickup trucks, and jeeps from July to November of FY24 to 33,638 units, down from 67,107 units during the same period the previous fiscal year.
The demand for two- and three-wheelers decreased by 12% and 3%, respectively. Sales of trucks and buses decreased by 48% and 45% in FY24, respectively, showing no signs of recovery.
Despite expectations for a marginal Rs1 per litre reduction in petrol prices, the government opted to maintain the current rates for the next fortnight, providing no relief to the inflation-hit masses in Pakistan.
It is evident that the persistently high prices of petrol and diesel are contributing to the sluggish sales of petroleum products, as indicated by the latest data.
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