As per provisional data, overall OMC sales in March 2022 rose 23% yoy and 19% mom to 1.82mn tons. Even excluding Furnace oil (FO), sales were up 17% mom. The increase in demand is majorly attributed to (i) higher offtake from FO-based plants due to start of the summer season, (ii) capping of HSD and Mogas prices (PM’s Relief Package), and (iii) greater working days and increased economic activity compared to February 2022.
HSD sales rose by 17% mom to 0.69mn tons, after a decline of 20% mom in the previous month, on reduced HSD prices and demand from the Power and Agriculture sectors. Furnace oil sales are up 27% mom to 0.28mn tons; this could partly be because of higher intake from IPPs amid increase in consumption due to the change in season. Mogas sales also witnessed an increase of 19% mom to 0.77mn tons, led by higher automotive sales in the last few months, while PM’s Relief Package on prices further elevated demand.
Market shares: While overall market share of PSO rose for the second consecutive month in February, up 4ppt mom to 52.3%, it was largely due to higher share in the FO market. SHEL’s market share contracted 0.4ppt to 7.9%, with the drag coming from HSD. APL’s overall share reduced by 0.8ppt to almost 9% after an increase of 0.8ppt mom in previous month, as it lost its share in the FO, HSD and Mogas markets.
Overall industry sales during 9MFY22 rose 16% yoy to 16.3mn tons, with 19% yoy growth in HSD sales, 16% yoy in FO sales followed by 10% yoy growth in Mogas. Jet fuel sales rose 52% yoy to 0.35mn tons due to normalising travel but are still below pre-Covid levels. HOBC sales fell 2% yoy to 0.13mn tons due to significantly higher prices.
Outlook: We think that elevated volumes in the months of March were due to the capping of prices of Mogas and HSD and resumption of demand from the Power sector. Going forward, however, if the prices of Mogas and HSD normalise to market levels (e.g. with the end of the PM’s Relief Package), the demand of petroleum products may take a hit.