Petroleum Sales Surge in November, Yet PDL Targets Remain Elusive

Karachi: A notable increase in petroleum sales was observed in November 2024, with the Oil Marketing Companies (OMC) industry reporting a 15% year-on-year growth in sales volumes.

According to JS Global, this uptick is attributed to the low base from the previous year when petroleum prices were higher, affecting demand. Despite these gains, the industry’s cumulative sales for the first five months of the fiscal year 2025 rose by only 5% year-on-year, highlighting challenges in meeting the Petroleum Development Levy (PDL) targets for the fiscal year.

In November, the OMC industry’s sales volume reached 1.6 million tons, marking a 15% year-on-year and a 6% month-on-month increase. Motor Spirit (MS) sales volumes specifically grew by 17% year-on-year, with Pakistan State Oil (PSO) leading with a 15% increase compared to the same period last year. Other companies such as APL, SHEL, and HASCOL also saw growth in their volumes, indicating a recovery trend in the market.

Hi-Speed Diesel (HSD) sales also improved, with a 21% year-on-year increase in November. However, PSO faced challenges in maintaining its market share, which averaged 45% during the first four months of FY25, compared to 49.4% in FY24. In November, PSO’s market share recovered to 51%, bringing the average share for the first five months of FY25 to 46%.

Despite these positive trends, the industry faces pressure in achieving the PDL target for FY25, set at Rs1.28 trillion, which is a 26% increase from the previous year. Current estimates suggest a potential shortfall of Rs122 billion from the FY25 target if the trend continues, with a 23% year-on-year growth in MS and HSD volumes needed in the remaining months to meet the target. The ongoing sales trends highlight the potential shortfall in the PDL collection, which is a critical component of the fiscal revenue targets.

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