July 2, 2021 (MLN): Pakistan OMC sales surged by 19% YoY in FY21 to 19.4 MT, a sharp recovery from last year which was impacted due to COVID-19 lockdown restrictions. This is the highest ever growth recorded in a single year.
The growth in industry sales was largely supported by three major products MS, HSD and FO, showing double-digit growth in FY21. Significant improvement in agriculture income levels and higher automobile sales for both the bikes and cars resulted in an all-time high of Motor Spirit (MS) sales of 8.2MT in FY21, up by 13% YoY while HSD posted an increase of 18% to 7.70 MT on the back of improved economic condition, increase in truck and buses sales and curb on smuggling of HSD from Iran, a report by Darson Securities mentioned.
Meanwhile, Furnace Oil (FO) sales registered an uptick in FY21, depicting an upsurge of 55% to 2.99 MT due to higher demand of electricity and shortage of gas and hydel electricity thus as a result FO based power plants are being run to overcome the shortage.
In the month of June alone, OMCs recorded 1.9 MT sales volume, up by 20% YoY owing to an overall uptick in economic activities & increased reliance on furnace oil (+197% YoY) for power generation. Petrol sales make another new high as volumes recorded at 776 KT (previous high 730KT in May-21) up by 7% YoY. The stellar growth in MS is spurred by increased economic activities, a significant uptick in agriculture income & curtailment of CNG. On the other hand, HSD sales recorded modest growth of 3% YoY in June’21, said Abdullah Umer, Research Analyst at Ismail Iqbal Securities.
On a sequential basis, the total industry volume showed an increase of 14% MoM, primarily due to a 102% massive increase in FO sales. On the other hand, MS sales inched up by 6% in June’21.
Company-wise, PSO posted the highest growth of 25% YoY in FY21 followed by SHEL which went up by 19%. HASCOL sales volume declined by 26% YoY due to working capital issues.
In FY21, PSO turned out to be a major winner as its market share improved to 46% from 44% in the same period last year, not only because of the rebound in FO demand but also weakened competition (aided by the government crackdown on smuggling and other malpractices). On the other hand, APL lost 1ppt share to 9% despite significant investment in storage. The research report by Intermarket securities believes this was partly because of a lost contract for supplies to the Army (APL has regained the contract for FY22). SHEL’s share remained flat at 8.0%.
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