Pakistan oil marketing companies’ sales decline 17% in July

Sales of oil marketing companies (OMCs) in Pakistan amounted to 1.2 million tons in July, down 17% compared to last month as well as July 2023.

Sales of petrol, high-speed diesel (HSD), and furnace oil fell by 16%, 18%, and 27% on a month-on-month basis, according to data shared by the Oil Companies Advisory Council.

Analysts attributed the reduced sales to higher fuel prices as petrol and diesel rates were hiked by 7% and 6% in July, respectively, compared to the previous month.

Moreover, furnace oil sales fell because of lower power generation from furnace oil-based plants.

Besides this, reduced economic activity and inflows of smuggled fuel also adversely affected sales.

Analysts estimate the petroleum development levy (PDL) collection for July at PKR 82 billion, 23% lower than the monthly target needed to meet the annual target for FY25, which is PKR 1.28 trillion.

“We do not rule out a shortfall in PDL collection — 7% of total revenue for FY25 — unless the levy cap is further revised upwards,” an analyst at JS Research said.