OMCs - Rich gone broke

October 4, 2019 (MLN): The total industry volumes for Oil Marketing Companies (OMCs) for the month of September, 2019 witnessed a decline of 15% YoY, bringing industry volumes for 1QFY20 to 4.31 million ton i.e. down by 9% YoY.

Product wise, the sale of Motor Vehicle Gas (MOGAS) decreased by 4% YoY, whereas Furnace Oil (FO) and High Speed Diesel (HSD) sales observed a decline of 23% YoY each during the said month.

Precisely, all four major Oil Marketing Companies, i.e. PSO, HASCOL, APL and SHEL, witnessed a drop in sales by 5%, 72%, 4% and 7% YoY respectively.  

Going by various research notes prepared by market analysts, the sale of MOGAS declined by 4% YoY to 647 thousand tons during the month, owing to considerable contraction in consumer spending. Nonetheless, the rise in prices of Compressed Natural Gas (CNG) helped in retaining buyers.

HSD sales dropped by 23% YoY to 547 thousand tons during the aforesaid month, due to a horde of factors including high base effect, smuggling of Iranian Diesel post US sanctions as well as ongoing economic slowdown. Resultantly, the total volume for the quarter stood at 1.9 million tons, which is merely 1% higher than the volumes of same period last year.

FO volumes depicted a decline of 23% YoY to 237 thousand tons, as the demand continued to remain flaccid owing to switch towards other mediums of power generation by customers.

Copyright Mettis Link News