KARACHI: The country’s oil demand dipped by eight per cent year on year in August while it saw a 4pc rise month-on-month to 1.41m tonnes, Arif Habib Ltd (AHL) said.

During the first two months (July-August) of 2023-24, the total oil sales came down by 7pc to 2.76m tonnes from 2.97m tonnes in the same period FY23.

Petrol sales inched up by 2pc to 0.67m tonnes in August from 0.66m tonnes in July and rose 5pc compared to 0.64m tonnes recorded in August 2022.

However, petrol sales during July-August FY24 soared by 8pc to 1.33m tonnes from 1.23m tonnes in the same period 2022.

High-speed diesel (HSD) sales stood 11pc higher during August to 0.55m tonnes from 0.49m tonnes in July 2023 while it was 0.50m tonnes in August 2022. During 2MFY24, diesel sales also went up by 11pc to 1.04m tonnes from 0.94m tonnes in the same period FY23.

The increase in sales of diesel appears surprising despite the huge influx of Iranian diesel in the country, while diesel demand was also high due to rice and cotton harvesting.

Furnace oil sales posted a drop of 18pc to 0.12m tonnes during August from 0.14m tonnes in July and 64pc year-on-year from 0.33m tonnes during August 2022. Its sales during 2MFY24 clocked in at 0.26m tonnes from 0.68m tonnes, down by 61pc compared with the same period FY23.

Topline Securities Chief Executive Mohammad Sohail said that petrol and diesel sales figures may show some drop in September as a result of twice price hikes in August. Sales had remained slightly slow due to a low number of working days in July.

Fahad Rauf, head of Research at Ismail Iqbal Securities, said furnace oil demand usually fluctuates depending on power generation, while the fuel is also being exported due to low demand in the country and slowly it is phasing out.

Besides, industries are also shifting towards LNG and coal-based power generation.

He said that improvement in diesel sales during July-August cannot be termed significant if compared to the same period last year when floods had hit various crops.

He said diesel sales also reflect economic activities which had remained somewhat sluggish, otherwise sales figures would have been much better.

Published in Dawn, September 3rd, 2023