Pakistan oil sales in Feb-2023 decreased by 16% MoM to ~1.22mn tons mainly due to 1) seasonal trend of slowdown in February, 2) higher prices of MS, HSD and 3) lower demand of FO for power generation.

This is the lowest monthly sales number since first COVID lockdown period of Feb-Apr 2020. FO/HSD/MS declined by 17/18/15% MoM respectively.

Oil sales recorded 21% YoY decline in Feb-2023 due to fall in all major petroleum products; MS down 15% YoY, HSD down 19% YoY, and FO down 47% YoY.

Among the listed entities, Pakistan State Oil (PSO) posted a decrease of 15% MoM and 19% YoY to 598k tons. PSO’s market share slightly improved to 49% in Feb-2023 compared to 48% in Feb-2022.

Attock Petroleum (APL) sales declined 18% MoM and 23% YoY. While, Shell Pakistan (SHEL) sales decreased by 9% MoM and by 18% YoY. APL and SHEL market share for Feb-2023 was 9% and % respectively compared to 10% and % share in Feb-2022.

During 8MFY23, oil sales are down 19% YoY to 11.69mn tons due to economic slowdown with decline visible in all major petroleum products. Higher inflationary environment, particularly the prices of MS and HSD have had a major impact on demand.

Product wise FO and HSD have witnessed the most major drop with a decline of 28% and 22% YoY respectively, while MS sales declined by 15% YoY in 8MFY23.

We expect FY23 oil sales to drop by ~20% YoY, mainly due to overall slowdown in the economy. Demand will continue to remain muted due to elevated inflation levels and inability of government to provide any relief in oil product prices.

Courtesy – Topline Securities