Pakistan's petroleum sales rise 6% in first quarter of FY26

October 02, 2025 (MLN): Pakistan's petroleum sector showed robust growth in the first quarter of fiscal year 2026, with total sales reaching 3.89 million tons, representing a 6% year-on-year increase from 3.68m tons in the same period last year.

The sector maintained its momentum in September 2025, recording an 8% year-on-year growth with sales of 1.37m tons compared to 1.27m tons in September 2024.

On a month-on-month basis, petroleum sales registered a 5% increase from August 2025's 1.30m tons.

The growth was primarily driven by two key factors: a 3% reduction in High Speed Diesel (HSD) prices during the month, which stimulated demand, and a gradual pickup in overall economic activity across the country.

MS offtake grew modestly by 1% month-on-month to 0.68m tons in September. On an annual basis, MS dispatches increased 8% year-on-year, driven by higher automobile sales.

For the entire first quarter of FY26, MS volumes reached 1.97m tons compared to 1.85m tons in the previous year, marking a 6% increase.

HSD sales showed impressive growth, improving 13% month-on-month to 0.59m tons in September. Year-on-year growth was even more pronounced at 20%, showing strong demand from the transportation and agriculture sectors.

Quarterly HSD volumes climbed to 1.62m tons from 1.42m tons, representing a 15% year-on-year increase.

In stark contrast, FO volumes plummeted 81% year-on-year in September to just 0.01m tons, continuing the trend of reduced reliance on FO-based power generation.

The monthly decline was 29% from August levels. For 1QFY26, FO sales totaled only 0.05m tons, down 78% from 0.21m tons in the previous year.

Industry Sales Volume

Note: Volumes in million tons

Source: Oil Companies Advisory Council (OCAC)

The country's largest oil marketing company witnessed a 4% year-on-year increase in sales to 0.57m tons in September 2025.

However, PSO's market share contracted significantly, declining from 44.1% in 1QFY25 to 41.8% in 1QFY26, representing a 2.3% point drop. For the quarter, PSO's total sales remained flat at 1.63m tons.

Shell Pakistan (WAFI) emerged as a strong performer with sales surging 25% year-on-year in September.

The company's market share improved to 8.5% in 1QFY26 from 7.4% in the previous year, gaining 1.1% points. Quarterly sales reached 0.33m tons, up 21% year-on-year.

Hascol's offtake improved 2% year-on-year in September to 0.04m tons. The company maintained a steady market share of 3.3% during the quarter.

GO was the standout performer in terms of market share gains, improving significantly by 4.1% points to 13.1% in 1QFY26 from 9.0% in the previous year.

Market Share Performance (1QFY26)

Source: Oil Companies Advisory Council (OCAC)

The improved petroleum sales translated into substantial government revenue. Petroleum Levy (PL) collection in 1QFY26 stood at approximately Rs353.3bn, while Carbon Surcharge Levy (CSL) collection amounted to around Rs11.5bn.

The Federal Government has set a revised Petroleum Levy target of Rs1,468bn for FY26, requiring a monthly average collection of Rs112bn.

The petroleum sector experienced year-on-year growth in the first quarter of fiscal year 2026 (1QFY26), attributed by industry analysts to several key factors. Motor Spirit demand saw a boost due to increased automobile sales.

Furthermore, the effective curtailment of smuggled petroleum products from Iran successfully redirected consumption toward formal Oil Marketing Company (OMC) channels.

Overall fuel demand was also supported by improved economic activity. Competitive strategies, specifically a 3% price reduction in High-Speed Diesel (HSD), also contributed to the positive performance.

Conversely, the continuing decline in Furnace Oil usage is driven by the power sector's strategic shift towards more efficient and environmentally friendly sources, such as liquefied natural gas (LNG) and renewable energy.

This strong performance in 1QFY26 indicates a recovery in economic momentum and the normalization of supply chains, establishing a positive outlook for the remainder of the fiscal year.

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