RECORDER REPORT

KARACHI: A total of 1,621,000 tons POL products are expected to be sold in May 2019, reflecting a massive 34 percent decline.

This bleak performance can be attributed to high speed diesel (HSD) sales which are expected to fall by 25 percent to 671,000 tons while furnace oil (FO) sales plummet by 65 percent to 301,000 tons, an analyst at JS Global Capital said.

During the month, MS sales are expected to be dented by 9 percent YoY basis. On a sequential MoM basis, MS sales are expected to take the greatest hit of 15 percent partly because of a significant 10 percent price hike notified in the first week of the month. HSD sales are expected to increase by 3 percent MoM to 671000 tons as transport of consumer goods and movement of passengers increase ahead of Eidul Fitr. FO sales are expected to jump by 24 percent to 301000 tons as demand from power plants rises to meet base-load demand during summer.

Under the given sales for May-19, cumulative sales in 11MFY19 are expected to fall alarmingly by 25 percent on the back of a 58 percent decline in FO demand and a 20 percent fall in the sales of HSD. The government’s stance on the energy mix would explain the decline in FO volumes during the period while weak demand for HSD is a result of the economic slowdown.