Oil and Gas

Overall growth in POL items mildly affected

Karachi, June 03, 2022: Total POL product sales clocked in at 2.17 million Metric Ton during May 2022, growing by 28% Year on Year while slowing down by 2% Month on Month basis.

Higher sales from last year are primarily owing to higher auto demand and higher Furnace Oil sales for power generation.

The MS sales have climbed 3% MoM in May and the petroleum product sales for 11 months of the current financial year are now at 20.62mnMT, higher by 18% from same period last year.

PDC pitfalls continue to unveil

With the government’s attempt to increase retail fuel prices, PDC component has now reached Rs9/litre for MS and Rs23.05/litre for HSD.
“As per our estimates, the total outlay from subsidizing MS and HSD now stands at c.Rs238 billion (0.3% of GDP).

“With the Federal Budget announcement on Jun 10th there is likelihood that the government will make necessary measures to remove the PDC and reinstate PDL and GST. While this will likely worsen inflationary outcomes, the move will pave way for more conducive deliberations with the IMF and ensure external stability,” said Wajid Rizvi at JS Research. 

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