KARACHI: Amid rising smuggling of Iranian oil products and claims of eroding market share of oil marketing companies (OMCs), local oil sales rose four per cent year on year in March and 3pc month-on-month to settle at 1.15 million tonnes.

However, oil sales during 9MFY24 fell by 11pc to 11.34m tonnes from 12.80m tonnes in the same period last fiscal year, according to Arif Habib Ltd (AHL) data.

Both petrol and diesel sales clocked in at 0.57m tonnes and 0.46m tonnes in March, showing 5pc and 4pc growth month on month and 3pc and 17pc rise year on year.

Furnace oil (FO) sales plunged by 11pc in March to 0.04m tonnes from 0.05m tonnes in February. However, March sales were 48pc lower than 0.09m tonnes in the same month last year.

Overall sales fall 11pc in first nine months

In 9MFY24, petrol and diesel sales shrank by 5pc each to 5.30m tonnes and 4.58m tonnes from 5.59m and 4.82m tonnes in the same period last year.

A steep fall of 53pc was registered in FO sales to 0.84m tonnes from 1.79m tonnes during 9MFY23.

The paltry increase in petrol and diesel sales during March was backed by a slight jump in vehicle movements for election campaigns by political parties and more working days than February.

As March auto sales data will arrive by the second week of this month, auto sales play a crucial role in oil output. Cars, jeeps, vans and pickups sales remained 41pc thin to 59,699 in 8MFY24 from 101,426 units in the same period last fiscal. Trucks, buses and two-wheelers sales also showed negative sales growth of 50pc, 43pc and 13pc, respectively.

Oil Companies Advisory Council (OCAC) in the last week of March alarmed the government over the influx of 4,000 tonnes of smuggled fuel daily into Pakistan, thus bleeding the nation of approximately $35.6m per month.

Price disparity between smuggled and legitimate fuel coupled with widespread availability and weak border controls is causing irreparable damage to legitimate business, the OCAC said.

Kati seeks cut in prices

While voicing his apprehensions over the recent hike of Rs9.66 per litre in petrol, Korangi Association of Trade and Industry President Johar Ali Qandhari demanded a more significant reduction in diesel prices to alleviate the economic burden on citizens and industries alike.

He said the expensive petrol would particularly hit the working class and low-income segments and continuous fuel price hikes could exacerbate economic difficulties, pushing more people below the poverty line.

On a Rs3.32 per litre cut in diesel price, he argued that this adjustment was insufficient to address the soaring costs of production and transportation. He cautioned that transporters were unlikely to lower fares significantly in response to marginal reductions in diesel prices, thereby failing to benefit both industries and consumers.

While stressing the urgent need for substantial reductions in petroleum prices to mitigate the economic strain on businesses and individuals, he hoped that the government would address the pressing concerns of the populace and take decisive action to alleviate their hardships.

Published in Dawn, April 2nd, 2024

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