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Pakistan Oil Marketing: Oil sales during July 2019 likely to fall by 3% YoY; Ex-FO sales remained flattish

• The July 2019 oil sales are likely to fall by 3% YoY, where Furnace Oil (FO) continued its downward trajectory amidst its lower usage in power generation after the commencement of RLNG & Coal based power plants.
• Excluding furnace oil, the volumetric sale during the outgoing month is expected to come down by 3% YoY on the back of decline in HSD sales by 8% YoY. 
• High-Speed Diesel (HSD) sales went down on YoY basis due to slowdown in economic activities and smuggling from Iran amid higher tax delta. However, petrol sales witnessed growth of 6% YoY.
• Pakistan State Oil (PSO) is expected to make a strong comeback with volumetric sales likely to grow by 20% YoY geared by all segments. Petrol, Diesel, and Furnace Oil sales are likely to witness a growth of 21%, 16%, and 23% YoY, respectively. Market share of the company in Petrol and Diesel inched up to 42% and 47%, up 2.5ppts and 3ppts MoM.
• Hascol Petroleum (HASCOL)  is expected to underperform and face sharp decline of 70% YoY due to strategic shift in the company’s sales policy from selling higher volumes to securing higher margins. The market share of the company in MS oil fell to 3.2% in Jul 2019 vs. last six months average of 8.4%. Similarly, in HSD segment, market share is down to 5.1% from 6-months average of 10.3%.
• Key risks to the sector include 1) further slowdown in the economy, 2) increase in turnover tax, and 3) currency depreciation.