Islamabad: The Oil Marketing Companies (OMC) sector recorded a significant decrease in both sales and volumes in August 2024, with a year-on-year decline of 14%, reaching the lowest levels for August in over two decades. This downturn in the industry is seen amidst various challenges including adverse weather conditions and shifts in agricultural practices.

According to AKD Securities Limited, the decrease in sales and volumes continues despite reductions in fuel prices, with Motor Spirit (MS) prices falling by PKR 16.5 per liter since July 2024. The major impact was observed in the sales of retail fuel products, with High Speed Diesel (HSD) volumes down by 17% and MS volumes by 7% compared to the previous year. The introduction of provincial initiatives to solarize agricultural tube wells, moving away from diesel-powered generators, has also contributed to this trend.

Moreover, diesel volumes are further impacted by the illegal seepage of grey products into major urban centers, causing operational difficulties for OMCs such as storage issues and inventory losses due to declining ex-refinery prices. Among the leading companies, Pakistan State Oil (PSO), Attock Petroleum Limited (APL), Shell Pakistan (SHEL), and Cnergyico PK (CNERGY) reported throughput levels of 528k, 114k, 92k, and 33k tons respectively for August 2024.

The report also highlighted concerns over the collection of the Petroleum Development Levy (PDL), with a projected shortfall of approximately PKR 200 billion from the annual target of PKR 1.28 trillion for FY25, based on current sales trends and a modest estimated growth rate of 3% YoY for the sector.