Pakistan OMCs: Industry volumes for Sept’19 decline 15% YoY

Provisional OMC sales data for Sep’19 remained dismal primarily led by decline in demand for High Speed Diesel (HSD) and Furnace Oil (FO). However, total sales volumes depicted improvement of 16% MoM to 1.50mn tons owing to Eid holidays in Aug’19.

While contraction in FO comes on the back of change in energy mix of the country, lower economic activity remains the prime reason for lower HSD sales.

To note, HSD and FO contracted 16/15% and 15%/15% QoQ/YoY during 1QFY20. We expect the trend to continue at the same pace going forward.

Compared to Sept’18 sales, overall volumes for Sept’19 remained depressed with 15% YoY drop where MoGas contracted by a mere 4% YoY while HSD and FO sales reduced by 24/23% YoY.

Cumulatively, 1QFY19 sales stood 8% YoY lower compared to SPLY due to decline in by HSD and FO while Mogas, up 5/2% QoQ/YoY, provided some respite.

Amongst the four key players, Pakistan State Oil Company (PSO) leapt ahead in terms of Market Share (M/S) that stood at 47% for 1QFY20, up 7ppt, after reporting 11% YoY increase in volumes.

Hascol Petroleum Limited (HASCOL) has witnessed a reduction in its market share to 4.7% for 1QFY20, lower than Shell Pakistan Limited (SHEL) after a reported decline of 68% in sales.

We maintain our Marketweight stance on the sector and continue to favor APL as our top pick amongst BMA OMC universe. (Courtesy – BMA Capital Management Ltd.)

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