July 17, 2002	Wednesday	Jamadi-ul-Awwal 6, 1423

KARACHI, July 16: Industrial consumption of petroleum, oil and lubricants (POL) has declined by 4 per cent in 2001-02 to 16.844 million tons as compared to 17.564 million tons in 2000-01.

Industry players and market analysts attribute the decline in POL consumption to 6.12 per cent fall in consumption of furnace oil to 7.657 million tons in 2001-02 as compared to 8.157 million tons in 2000-01.

According to figures available from the oil industry, only Shell Pakistan and Attock Petroleum Limited’s sales of fuel oil have shown a jump. Shell’s sales jumped to 820,000 tons in 2001-02 as compared to 488,000 tons the previous year. However, sales of fuel oil by Pakistan State Oil (PSO) dropped to 6.079 million tons as against 7.013 million tons, while Caltex sales also dropped to 301,000 tons as compared to 413,000 tons. APL’s fuel sales showed a rise to 336,000 tons from 243,000 tons.

Head Research Invest Cap and Securities, Mohammad Sohail said that Wapda’s refusal to buy fuel oil from PSO for few months can be attributed as the main reason that made a major impact in overall furnace oil sales. As a result, Shell took over the major share of PSO in fuel oil.

He said the switchover of many power plants to gas from fuel oil followed by cement plants to coal in the last fiscal were also considered as main reasons of decline in fuel oil sales. In 2000-01, there was acute shortage of water that forced Wapda to rely on thermal power generation. In 2001-02, shortage of water was there but not to that extent of previous fiscal.

A very scant decline of 0.34 per cent was seen in consumption of high speed diesel (HSD) to 6.834 million tons in 2001-02 as compared to 6.858 million tons of the previous fiscal. This decline seemed strange as bus and truck sales have improved in 2001-02.

Sales of truck (Hino, Nissan and Mazda) in the last fiscal stood at 1,134 units as compared to 925 units while sales of bus jumped to 2,273 units as against 1,384 units in 2000-01.

Similarly, petrol’s consumption caved in by 1.8 per cent to 1.094 million tons from 1.114 million tons. Oil analysts say that rising switchover of car to compressed natural gas (CNG) was the main reason of slight fall in petrol sales, otherwise car sales in 2001-02 rose by 11 per cent to 42,341 units as compared to 38,047 units in 2000-01. Besides, sales of two-wheelers also rose to 120,083 units as against 108,649 units in 2000-01.

The suspension of flights by various international airlines during January to March resulted in fall of jet fuel consumption to 571,000 tons from 606,000 tons. Sales of light diesel oil (LDO) also dropped by 14 per cent to 234,000 tons from 271,000 tons. Sales of lubricants stood at 84,000 tons as compared to 92,000 tons.

The drop in various POL products consumption can be linked to September 11 incidents followed by Afghan-US war and India-Pakistan stand-off in December-January that caused a slump in industrial production and economic activities, resulting in reduced domestic consumption of POL products.

The above figures do not include consumption by the refineries which range between 500,000-600,000 tons per annum.

The Managing Director, Pakistan State Oil (PSO), Tariq Kirmani forecasts a better POL consumption prospects for the current fiscal year, saying that there would definitely be growth in the next three to four months.

He said diesel demand is expected to pick up as transport sector is showing improvement. Besides, demand for jet petroleum will also increase following return of various airlines to Pakistan.

“I think industrial activities will improve in months to come as economic indicators are showing signs of improvement,” Kirmani said.

Mohammad Sohail of Invest Cap was of the view that POL consumption is likely to go up by 2-4 per cent in the current fiscal due to positive economic indicators.