Islamabad: Petroleum sales in Pakistan experienced a significant drop in July 2024, posing challenges to the government's revenue collection goals for the fiscal year 2025. The sales volumes for oil marketing companies (OMCs) decreased by 11% year-over-year and 17% month-over-month, totaling 1.2 million tons. This decline is reflected across various petroleum products, with Motor Spirit volumes down 16%, High-Speed Diesel falling 18%, and Furnace Oil sales plummeting 27% compared to the previous month.

According to JS Global, the reduction in petroleum product sales is attributed to increased prices and lower power generation from Furnace Oil-based plants. In July 2024, Motor Spirit and High-Speed Diesel prices rose by 7% and 6% respectively. The overall market share of Pakistan State Oil (PSO) decreased to 46% from 50% in July 2023, while other companies like APL, HASCOL, and SHEL managed to maintain their market shares from the previous year.

The Petroleum Development Levy (PDL) collection for July 2024 is estimated at Rs82 billion, which is 23% below the monthly target needed to meet the fiscal year's goal of Rs1.28 trillion—a 26% increase from the previous year's collection. To achieve this target, Motor Spirit and High-Speed Diesel volumes would need to grow by approximately 8% from the FY24 levels. However, with the current downward trend and the potential increase in PDL to Rs70 per liter from mid-August, achieving the necessary 10% year-over-year growth in the remaining months appears challenging. The possibility of a shortfall in PDL collection is significant unless there is a considerable adjustment in the levy.