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Oil sales decline to 14.2m tonnes

- File photo

KARACHI: Oil sales of the country would stand at 14.2 million tonnes for the nine months of the financial year 2013 (July-March), showing a decline of one per cent over sales of oil in the similar three quarters of the previous year.

The exact figures are yet to be released, but most analysts agree to a depressed number YoY.

Among the individual products, sales of furnace oil and diesel, which cumulatively contribute about 80pc to the oil sales, were thought to decline by one and five per cent, respectively.

On the other hand, petrol sales is expected to increase by 15pc, primarily benefiting from gas curtailment to CNG sector.

“Although recent increase in margins of diesel and petrol add positive variance to oil sector’s profitability, the presence of circular debt along with muted volumetric growth will  continue to

be a drag on sector earnings,” says Nauman Khan, energy sector analyst at Topline Securities.

Going forward, increase in electricity tariff was the key to changing fortunes of the sector, the analyst thought.

Stand alone in March, the country’s oil sales were forecast to be 1.5m tonnes, up 11pc over the previous month (MoM) and 4pc over March 2011 (YoY).

The sales of HSD would remain depressed to stand at around 470,000 tonnes, which represents fall of 4pc over February sales. Higher prices along with restricted economic activity were major factors, which were seen to push HSD consumption down in the country.

Petrol sales figures could stand at 260,000 tonnes, down by 4pc from February but around 8pc higher compared to March 2012.

Although volumes might remain stagnant, government had revised oil prices, which improved oil marketing companies and dealer margins on diesel and petrol.

OMCs margin on high speed diesel was revised upwards by Re0.10 or 6pc per litre while for motor gasoline, it was raised by Re 0.25 or 13pc.

Several analysts thought that though better than nothing, the increase in regulated margins was ‘marginal’.

Analysts recalled that the Economic Coordination Committee of the Cabinet had approved margin hike in its meeting on Feb 26.