Dear Clients,

According to data released by OCAC, total OMC sales increased by 49% Y/Y to 1,486kT during Mar21 against 1,000kT recorded during Mar20. The increase was largely on account of Mar20’s low-base because of peak lockdown restrictions implemented back then. On a monthly basis, OMC off-take picked up by 6% M/M supported by rising FO off-take.

MS off-take increases by 9% Y/Y during 9MFY21

Total MS off-take increased by 9% to 6,057kT during 9MFY21 largely supported by rising vehicle sales, and increased inter-city transport. On a monthly basis, MS sales off-take recovered by 9% M/M 685kT because of additional easing of restrictions, particularly the educational institutions. Moreover, warming weather likely instigated increased inter-city travels particularly towards the northern region of the country. Onwards, the 3rd, more virulent wave of the virus may likely compel the provincial and federal government to impose additional restrictions on travel, keeping a check on MS sales in the coming months. PSO emerged as the market leader in MS sales during Mar21 with a share of 42%.

HSD off-take increases by 17% Y/Y during 9MFY21

Total HSD sales picked up by 17% Y/Y to 5,373kT during 9MFY21 aided by: 1) recovering economic activity evidenced by the record-high LSM index, and 2) action against smuggled petroleum. On a monthly basis, HSD sales dipped by 3% M/M to 535kT likely because of the elevated prices of the commodity. Onwards, we project HSD sales to pick pace from Apr21 onwards on account of the wheat harvest season. Moreover, despite the 3rd wave of the pandemic, the federal government has ruled out a total economic lockdown, likely supporting potential HSD off-take for the remainder of FY21. PSO emerged as the market leader in the commodity with a share of 46% during Mar21.

FO off-take increases by 43% Y/Y during 9MFY21

FO sales picked up by 43% Y/Y to 2,303kT during 9MFY21 because of increased demand from power plants. The prevalent gas shortage in tandem with FO’s comparatively lower price (vs. last year) increased demand for the commodity from both the national power plants and private-sector captive plants. On a monthly basis, FO sales rose by 22% M/M to 213kT likely because of the onset of the warmer season, increasing demand for electricity. Moreover, the restrictions on gas supply to the industrial units also compelled many to switch over to their FO-based captive plants. Onwards, the commencement of several coal-based projects will likely limit the overall demand for FO. PSO emerged as the market leader in the commodity with a share of 55% during Mar21.

Regards,
KASB Research