Karachi, October 06, 2023 (PPI-OT): Lower POL sales do not bode well for PDL target

Lower OMC sales do not bode well for PDL collection targets set in understanding with the IMF. We look at implications for FY24 PDL collection target at different levels of OMC volumes.

OMC sales in Sep-2023 declined 31% YoY to 1.1mn tons (-25% MoM), taking 1QFY24 sales to 3.8mn tons (-15% YoY). The decline was led by slowdown in economic activity including considerably lower auto sales and lower demand from power sector.

We believe there is a likelihood for the government to increase PDL charge to Rs60/litre for HSD in the near future to meet the ambitious target of Rs869bn set for FY24. Pressures on tax collection may also invite imposition of GST charge on these products, currently at zero, however, higher retail prices may further have an unfavourable impact on POL product volumes.