In June 2022, overall sales of petroleum and lubricants were 1.93 million tonnes, down 11 per cent from the previous month but unchanged from the previous year.
Petrol and high-speed diesel (HSD) sales both experienced significant monthly declines, falling by 12 and 16 per cent, respectively.
Sales of all oil products rose by 16 per cent YoY to 22.595 million tonnes during FY22 from 19.45 million tonnes during the same period in FY21.
Analyzing the data demonstrates that expansion was seen in all categories, with offtake increasing to 8.95 million tonnes, 8.87 million tonnes, and 4.04 million tonnes, respectively, up by 9 per cent, 15 per cent, and 35 per cent on YoY compared to the same period last year.
Ismail Iqbal Securities analyst Abdullah Umer stated, “We believe that significant rise in both diesel and petrol prices are the main reason behind the decline in retail sales.”
According to the brokerage house, “Healthy economic activity, robust agricultural activity, upbeat automobile sales, and curb of HSD smuggling remained major drivers behind such stupendous growth.”
Although the current government has chosen to manage petroleum product prices by levying a Petroleum Development Levy (PDL) and sales tax even if international oil prices decline, the brokerage house anticipated a further slowdown in diesel and gasoline sales going forward.
In the coming months, retail fuel demand is likely to be further impacted by an increase in carpooling, increased use of public transportation, a change in consumer behaviour (moving from passenger cars to two-wheelers), high inflation, and a general slowdown in economic activity.
“We expect RFO sales to remain intact due to a likely decline in RLNG & imported coal-based power generation.”
The government announced a late-night price increase for petroleum products on Thursday, raising the ex-depot price of gasoline to Rs248.74 per liter (after an increase of Rs14.85) and diesel to Rs276.54 (after a hike of Rs13.23).
Diesel was previously priced at Rs263.31 per litre and petrol at Rs233.89.
The pricing structure included a Rs10 petroleum levy on gasoline. The cost of high-speed diesel, kerosene, and light diesel oil has also increased by Rs5 per litre.
Finance Minister Miftah Ismail announced the government’s decision, stating that these prices would go into effect at midnight in order to make up for the Rs-230 billion loss experienced during the fiscal year that ended on June 30th, 2022.
According to him, the country’s budget deficit, which reached a historic high of Rs5 trillion, made the increase in these prices inevitable.