Pakistan oil marketing sees a growth of 16% YoY in FY22

Pakistan oil sales declined by 11% MoM to 1.9mn in June 2022, mainly driven by ~14% MoM dipped in MOGAS and HSD sales. This was due to a sharp increase in MOGAS and HSD prices by 31% & 51% in June 2022, respectively. We believe this led to reduced demand for petroleum products and a rise in public transport/carpooling usage

On a YoY basis, oil sales remained flat during June 2022.

MOGAS and HSD sales were down 12% and 16% on an MoM basis to 702k tons and 713k tons, respectively. Excluding FO, overall petroleum sales volume stood at 1.48mn tons in Jun-22, down 13% MoM and 7% YoY.

In FY22, Pakistan’s oil sales clocked in at 22.6mn tons, up 16% YoY, which was much better than the last 10-year growth rate. This was mainly led by higher than expected growth in Furnace Oil (FO) sales which reached 4mn tons (highest since FY18) due to high demand in power plants amidst non-availability of RLNG along with low hydel generation.

Excluding FO, oil sales were up 13% YoY in FY22 due to an uptick in MOGAS and HSD sales.

Motor Gasoline (MOGAS) and High-Speed Diesel (HSD) volumes witnessed a 9% YoY and 15% YoY to 8.9mn tons each in FY22. This was driven by (i) strong economic growth, including growth in the Agriculture sector, and (ii) an increase in auto sales.

Pakistan State Oil (PSO) sales outperformed the sector growing by 29%, whereas Attock Petroleum (APL) sales improved by 22% in FY22. Shell Pakistan (SHEL) and Hascol Petroleum (HASCOL) underperformed the market during FY22.

Moving forward, we expect oil sales to decline by around ~15% YoY in FY23F tons due to:

  1. The anticipated decline in auto sales in FY23.
  2. Low growth is estimated in agriculture (2.5% for FY23F vs 4.4% in FY22).
  3. A sharp increase in petrol/diesel prices.

Courtesy – Topline Securities

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