Karachi, January 01, 2019 (PPI-OT): OMCs: Petroleum products sales down 25% YoY in Dec-2018
OMC Sales for Dec-2018 are expected to post a sharp decline of ~25% YoY (1,396k tons in Dec-2018 against 1,872k tons in Dec-2017).
This decline is largely driven by Furnace Oil sales, which are expected to clock in at 207K tons, posting a decline of 52% YoY but increasing by 56% MoM.
HSD is expected to follow with decline of 27% / 6% YoY / MoM while MS sales will post a marginal change of -3% / +7% YoY / MoM.
Fuel Sales decline in Dec-2018
It is expected that OMC sales will post a sharp decline of ~25% YoY from 1,892k tons in Dec-2017 to 1,396K tons in Dec-2018. This decline is largely driven by lagging Furnace Oil (FO) sales in the backdrop of the government’s ban on FO based power generation. However, on a MoM basis a slight improvement of ~5% is expected. During 1HFY19, fuel sales are expected to post a decline of 31% YoY as they clock in at 9,134K tons. Both High Speed Diesel (HSD) and Motor Spirit (MS) are expected to post declining sales figures.
Motor Spirit: Price plays a role
Motor Spirit (MS) is projected to end Dec-2018 with sales of 581K tons which is a 3% YoY decline. Over the year ended Dec-18, MS prices went up ~20% which could partially explain the fall in sales volumes. On a MoM basis, prices were reduced by ~4.6% while sales increased by 7%. During 1HFY19, MS sales will aggregate to 3,642K tons, a marginal decline of 1%. As far as companies are concerned, PSO – although down by 18% YoY – is expected to post a sequential improvement of 7% MoM. APL is expected to lead the MS sales growth with a 42%/30% YoY/MoM increase in volumes while HASCOL posts a 40%/14% decline in sales, respectively.
HSD paints a gloomy picture
High Speed Diesel (HSD) sales are projected to clock in at 557K tons, down 27% YoY and 6% MoM. In the first 6 months of FY19, a total of 3,703K tons of HSD are expected to be sold which is a 21% YoY decline. In this segment, HASCOL is projected to bear a 60% / 43% YoY / MoM dent in sales volumes for Dec-2018 while PSO’s sales volumes are projected to decline by 51% / 16% YoY / MoM. APL, however, is expected to outperform the industry with a 20% / 12% YoY / MoM growth. Given so, APL’s market share will increase to 13%.
Furnace Oil, no more
It is anticipated that total FO sales for Dec-18 will clock in at 207K tons, down from 430K tons in Dec-17 (a 52% decline) while sales for 1HFY19 are expected to fall by 66% YoY. The government’s strict stance on Furnace Oil based power generation plays a crucial role in the decline. However, an increase of 56% on a MoM basis is expected to be realised as power plants have lifted some FO in the month of December. Whether this action can be recurring however, is a serious question mark. In the FO segment, all players posted a decline in sales volumes. However, PSO was hit the hardest with a 58% YoY decline followed by APL which posted a 53% fall. In terms of Market share, PSO continues to be the leader with a 58% share.