November 24, 2001	Saturday	Ramazan 8, 1422

KARACHI, Nov 23: The industrial consumption of petroleum, oil and lubricants (POL) has fallen by 10 per cent to 5.3 million tons in July-October 2001 as compared to six million tons in the same period of 2000.

Industrial POL consumption also plunged by 13.5 per cent in July-Sept 2001 as against the corresponding period of 2000.

A break-up, compiled by a leading oil marketing company (OMC), reveals 8.6 per cent fall in consumption of high speed diesel to 2.134 million tons in July-October 2001 as compared to 2.335 million tons in the same period of 2000.

Similarly, MOGAS consumption fell to 364,000 tons as compared to 386,000 tons in the first four months of 2000 followed by 10 per cent decline in fuel oil to 2.409 million tons from 2.677 million tons.

The consumption of light diesel oil (LDO) plunged by 33 per cent to 72,000 tons from 108,000 tons followed by a drop of 34.1 per cent in kerosene oil to 110,000 tons from 167,000 tons.

“OMCs are highly concerned over the ongoing negative trend in POL consumption and it is perhaps for the first time in the country’s history,” a senior official in an OMC said.

Some OMC executives link the decline to poor market conditions in the wake of September 11 incidents.

“There has been a slowdown in the overall economy particularly our agro-based economy,” Chairman and Chief Executive, Shell Pakistan Limited (SPL), Farooq Rahmatullah told Dawn on Friday.

Pointing out other reasons of the decline, he said our trade under Afghan Transit Trade (ATT) has stopped that is why the offtake of diesel by the transporters has fallen.

In the post-September 11 situation, foreign airlines business has affected, slashing consumption of jet fuel.

As far as furnace oil is concerned, KESC power plants have started shifting to gas from fuel oil coupled with slowdown in industrial sector.

“It seems as a temporary phase. I think things will remain depressed till December,” Shell chief said hoping for better prospects in the long-run for POL consumption from January.

As for petrol, he said people have been continuously been switching over to install CNG kits in their cars since the petroleum prices have gone up. He added a total of 140,000 cars have been converted into CNG till now.

The CNG option has been attractive as far as the gap between petrol and CNG is concerned. “I think number of cars will surge to 200,000 if the gas prices remain feasible.

Pakistan’s annual POL demand was 18.2 million tons in 2000 in which the share of diesel and furnace oil is 40 per cent and 45 per cent respectively.

The industry consumption of POL products has been essentially stagnant depicting a negative growth of 0.5 per cent primarily due to recession.

“I hope the growth in the long-run will impove but in the short-run, it has been affected,” SPL MD said.

Head of Research, Invest Capital and Securities, Mohammad Sohail said that slowdown in oil consumption in Pakistan looks good for our foreign exchange management as the country produces only 15 per cent of the total oil requirement but it bodes ill for the economic and industrial sector growth which has been plummeting since the last few months.

He said the slump is contributed by economic recession as slowdown in power companies and road transport directly affects the sales of fuel oil and diesel. More than 70 per cent of fuel oil is used by power generation firms followed by industrial sector consuming over 15 per cent. Road transport specially heavy vehicle absorbs more than 90 per cent of sales of diesel.

He said falling oil prices may trigger some improvement in consumption of POL products but the situation will again reverse in case prices go up.