OMCs continue double digit growth in December

January 4, 2021 (MLN): The overall sales of Oil and Marketing Companies (OMCs) for the month of December 2020 witnessed a growth of 16%YoY to 1.59 MTs as compared to 1.37 MTs in the same month of last year, bringing industry volumes for 6MFY21 to 9.75 MTs, up by 12% YoY.

To note, this is the second consecutive month where OMCs sales volume increased in double-digit as in the previous month it witnessed a growth of 21 YoY.

On a sequential basis, OMCs’ volumetric sales posted a decline of 7% MoM from 1.7 MTs, mainly due to lower sales of High-Speed Diesel (HSD) which fell by 22% MoM to 622 MTs as opposed to 802 MTs recorded in the previous month.

The YoY growth in sales of OMCs is driven by Furnace oil (FO) and HSD demand which improved by 108% YoY and 13% YoY to 240 MTs and 622 MTs respectively. The improvement in FO and HSD demand is attributable to high demand from the power sector amid a shortage of gas during winters and pickup in overall economic activity after improvement in the Covid-19 situation.

Furthermore, with the limited domestic travel amid Covid-19 and hike in local oil prices, the sales of Motor Spirit (MS) rose by 5% YoY while declined by 3% MoM to 673 MTs.

During 1HFY21, the growth in industry volumes is driven by 8%, 13%, and 38% YoY uptick in MS, HSD, and FO segments respectively.

According to the report by Darson Securities, the OMCs volume is expected to remain in the north in the coming months as PM’s order to curb all smuggling from Iran, further improvement in economic activities, increase in car sales and continue power production on FO during the winter season, all these factors are expected to bode well for OMCs.

Company-wise, PSO posted the highest growth in volumetric terms with Dec-20 sales volume of 721K tons, up by 22%YoY. SHEL and BYCO also posted a positive growth of 16% and 49% respectively while HASCOL and APL sales went down by 26% and 16% respectively.

In growth terms, BYCO posted the largest volumetric growth of 97% YoY in sales of petroleum products, driven by 7.3x YoY increase in FO sales. This was followed by a 33% YoY rise in Shell’s volume and a 15% YoY increase in PSO volumes. The strong consumption of HSD was the major contributor in increasing Shell’s and PSO’s sales volume.

With regards to market share, PSO grasped the largest market share of 45%, up by 1ppts MoM, while SHEL, APL, HASCOL, and BYCO maintained their market shares at 8%, 8%, 5% and 7% respectively.

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