KARACHI: Oil Marketing Company (OMC) sector sales volumes reached 1.27 million tons in September 2024, marking a 20% year-on-year growth, largely driven by an increase in retail fuel sales and consecutive cuts in fuel prices.

According to AKD Securities Limited, retail fuel sales surged by 24% on a year-on-year basis, supported by a PkR12 and PkR16 per liter reduction in motor spirit (MS) and high-speed diesel (HSD) prices respectively during the month. The increase also followed the resumption of transport activity after the end of the monsoon season in August. Notably, HOBC volumes reached their highest level since March 2022, driven by a significant decline in the price of premium motor fuel.

HSD sales rose by 25% compared to September 2023, though they remained below the 24-month average. The increase was attributed to an abnormally low base in the same period last year when HSD prices were at PkR330 per liter. However, the diesel market faced challenges due to grey product seepage into major urban centers, resulting in lower refinery utilization and storage issues.

Furnace oil (RFO) volumes, in contrast, saw an 18% year-on-year decline, driven by reduced reliance on fuel-oil-based power generation ahead of the autumn season. Among the leading players in the sector, PSO, APL, SHEL, and CNERGY posted throughput levels of 548,000, 114,000, 93,000, and 46,000 tons respectively, with market shares of 43.1%, 9.0%, 7.3%, and 3.7%.

AKD Securities Limited also noted concerns over Petroleum Development Levy (PDL) collections, projecting that the current growth rate of 3% year-on-year could result in a full-year shortfall of approximately PkR180 billion against the FY25 budgeted target of PkR1.28 trillion. A potential increase in the PDL to PkR70 per liter could reduce this shortfall, but the sector remains exposed to challenges, including rising crude prices and the increasing presence of new entrants.