Sale of petroleum products halves in Pakistan, high inflation to blame

Consumption of petroleum products has registered an astonishing decline in Pakistan. Sales of furnace oil (a fuel used in steam boilers in power plants, aboard ships, and in industrial plants) fell to 72,000 tonnes in April 2023 compared to 461,000 tonnes in April 2022, a report published in Dawn said.

The furnace oil sales for the period 10M FY2023 were 1.866 million tonnes, down 40 per cent from the same period last year, the report said.

Additionally, a drop of around 50 per cent was registered in diesel sales. The sales declined to 461,000 tonnes in April 2023 when compared to 919,000 tonnes in April 2022, the Dawn report added. However, a month-on-month increase of 16 per cent was seen in diesel sales.

Referring to petrol sales, the report said that Pakistanis bought 25 per cent less of the fuel, year-on-year. However, sales went up 4 per cent on a month-on-month basis. Total petrol sales, however, plummeted 17 per cent to 6.173 million tonnes.

Talking about the monumental fall in sales, an industry expert was quoted in the report as saying that the decline in furnace oil and diesel sales was the main reason behind the overall dip in sales of petroleum products.

Given the high inflation and troubled economic situation of Pakistan, oil sales are expected to remain low in the near future. This has partly to do with the government's inability to bring down fuel prices, the expert added. Low power generation in the country is also to blame for the reduced demand of furnace oil.

Additionally, the marginal recovery in diesel sales during the month of April can be attributed to increased mobility due to the festive season and Eid holidays, the report said.