Petroleum product sales rebounded in the last month after a dismal February with Oil marketing companies (OMC) witnessing an increase of 23 per cent in sales of petroleum products on a year-over-year (YoY) basis in March 2022.
Overall petroleum sales in March 2022, increased to 1.82 million tonnes compared to 1.54 million tonnes in March 2021, as per the data released by Arif Habib Limited.
The stability comeback shows a 19 per cent increase in overall OMC sales on a month-over-month (MoM) basis.
OMC volume growth was driven by furnace oil, which climbed by 34 per cent on a YoY basis, followed by HSD volume growth of 29 per cent and MS volume growth of 13 per cent. MoM growth in OMC volumes followed a similar pattern, with FO taking the lead.
Although the increase in furnace oil volumes was driven by increased furnace oil usage in the power sector due to low gas and Re-Gasified Liquefied Natural Gas (RLNG) availability.
The increase in HSD volumes was driven by increased demand from the transportation and agriculture sectors and increased usage in generators and the power sector.
Moreover, the government’s price caps and the additional number of days in March compared to February were the main contributors to MoM growth in diesel and gasoline sales.
Consequently, petroleum sales increased by 19 per cent on a YOY basis in 9MFY22, with double-digit increases for petroleum products.
Diesel sales grew by 17 per cent, followed by 16 per cent increase for furnace oil and a 10 per cent growth for motor oil.
While some are expecting a drop in petroleum sales due to the political turmoil and rising commodity prices, others say that higher oil consumption cannot be overturned as the summer is already here and people are likely to consume more electricity, also that the power sector may switch to furnace oil due to RLNG commitment defaults.