By: Arif Habib Limited
Oil & Gas Marketing: Strong Petrol and Diesel demand pushes oil sales up 5% MoM in Aug-15; Oil sales (excluding non-energy) posted a 5% MoM increase in Aug-15 to 1.81mn tons against 1.71mn tons in Jul-15. This was mainly led by a healthy 8% and 6% MoM increase in Motor Spirit (Petrol) and High Speed Diesel (HSD) demand, respectively. Likewise, Furnace Oil (FO) consumption exhibited a 2% MoM rise during the month to 0.27mn tons. However, on YoY basis, the industry sales were down 3% YoY, led by FO.
Oil consumption receded by 9% YoY during 2MFY16: For 2MFY16 cumulative, total oil consumption in the country receded by 9% YoY to 3.52mn tons, as the grounds were gained by a massive 35% YoY growth in Petrol sales. However, this was largely diluted by a 12% and 23% YoY fall in Diesel and FO volumes, respectively.
Petrol sales jumps 41% YoY: Declining prices and limited availability of CNG, particularly in the northern regions, has increased demand for Petrol, as depicted by a massive 41% YoY jump in Petrol sales to 0.46mn in Aug-15, taking 2MFY16 sales to 0.89mn tons, a rise of 35% YoY recorded in 2MFY16. We expect this strong demand momentum to continue ahead, as declining prices are expected to take Petrol demand up 13% YoY in FY16, to 5.3mn tons.
Lower Diesel prices inching up sales: Declining prices along with a ban on usage of CNG in public transportation across the country has inched up Diesel sales by 6% MoM, and 1% YoY to 0.55mn tons. In addition, transportation activity increased in Aug-15 post floods seen in Jul-15. Going forward, we expect Diesel demand in FY16 to record at 7.8mn tons, compared to 7.4mn tons in FY15, a up 6% YoY.