Pakistan OMCs: Sales flatten out in May amid long Eid holidays

  • OMC sales flattened out in May due to long Eid holidays
  • During 11MFY21, however, overall sales are up a handsome 19% yoy
  • We expect the sales momentum to continue into FY22 as the overall economic rebound is likely to accelerate

As per provisional data, overall OMC sales in May 2021 have remained flat mom at c.1.69mn tons (up 14% yoy though partly distorted by lockdowns last year). The sequentially flattening of sales is attributed to long Eid holidays following Ramadan earlier in the month. Overall sales in 11MFY21 rose c.19% yoy to 17.5mn tons compared with a 12% yoy decline in sales in FY20; the growth was led by removal of multiple stimulus measures by the government and SBP which revived overall economic activity.

HSD sales fell 3% mom to 0.76mn tons (up 11% yoy) which was mostly affected by lower economic activity amid Eid holidays; HSD sales is likely to rebound in the coming months amid sowing of rice crop. Mogas sales grew 9% mom as it remains the preferred fuel for private vehicles (especially motorcycles). Furnace oil sales fell 5% mom as there was sufficient RLNG for power generation; PSO had 32% share in total FO sales vs c.50% in the prior 10 months.      

Overall market share trends in May: During May, PSO’s overall share fell c.2ppt to 44.8%, partly because of the lower share in FO market and c.2ppt less share in Mogas (to 42.6%); its share in the HSD market rose 1ppt to 49%. Overall shares of SHEL and APL were steady at 8.0% and 8.5% respectively, but Total-Parco and Go had market shares of 9.4% and 9.1%, respectively. We understand that smaller OMCs such as Go gain market share during the months of high agri-demand.

During 11MFY21, PSO’s market share rose c.3ppt to 46.1%. SHEL’s share was nearly flat at c.8.0%. APL lost c.1.5ppt to 8.9%, despite significant investment in storages recently – possibly because of Go gaining strength in the North market and group refineries not operating at full capacity throughout the year.  

We think that the present sales momentum will continue in FY22 as the economic stimulus measures are likely to remain in place until at least end of 2021, in our view. Catalysts include: recent surge in car sales amid new model launches, and accelerated vaccine rollout will increase intercity travel.   

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