Oil consumption declines by 2%YoY during 9MFY12 – Alfalah Securities Limited

Karachi: Oil sales stood at 14.3 million tons during 9M FY12 against 14.6 million tons in the same period last year, registering a decline of 2%.

According to Alfalah Securities Limited, Oil consumption was 1.6 million tons in March 2012 registering a decline of 11%YoY and a surge of 18% MoM. Lower sales are mainly due to fall in the consumption of fuel oil, which declined by 20% due to non payment of dues pertaining to circular debt and drop in jet fuel (JP) consumption which declined by 48% on the back of cutting of NATO supply routes. However, the petrol sales witnessed a surge of 20% to 239k tons due to higher CNG outages in the country. In order to make the gas available to the household and industrial sector, the government is raising CNG prices to discourage it use in the transport sector which is likely to further increase the demand of petrol and also diesel going forward. The higher petroleum products’ consumption would require higher imports which is also likely to exert pressure on the current account deficit and foreign exchange reserves.