Karachi, March 06, 2023 (PPI-OT): Pakistan OMC’s – Offtakes see big monthly fall during Feb’23

POL product sales clocked in at 1.22mn tons for Feb’23, falling by -16%/-21% on MoM/YoY basis, compared to 1.44/1.54mn tons during Jan’23/ Feb’22.

In addition, there were severe fuel shortages at petrol stations in Central Punjab, as talks of price hikes remained rampant throughout the month. This led to dealers choosing to stockpile fuel instead of continuing with normal operations.

On an 8MFY23 basis, total POL sales remained down by 19%YoY, clocking in at 11.69mn tons vs. 14.45mn tons SPLY. The decline is largely due to a drop in organic demand, as petroleum sales tend to be closely tied to the overall health of the economy.

HASCOL stood the most resilient amidst the broad based industrial decline as total volumes for the month stood at 27k tons, up by 4%/5% MoM/YoY.

On a forward looking basis, rampant inflationary pressures in the coming quarters alongside a depressed GDP outlook during the year period compels us to assume negative volumetric growth for the industry, by approximately 20% for FY23.

APL (TP: PkR380/sh) remains our top pick from the sector, with the company being a perfect mix of capital upside and dividend yield.