Pakistan’s oil consumption rises 3% in December 2024

Petrol consumption rose by 5% compared to the same period last year, indicating a recovery in consumer spending power In a positive sign for Pakistan’s economy, oil consumption increased by 3% year-on-year in December 2024, according to a recent report by Topline Securities. This uptick in petroleum product sales suggests a gradual economic recovery and improved consumer spending power in the country. The report reveals that Pakistan’s oil marketing companies (OMCs) recorded sales of 1.

28 million tons in December 2024, representing a 3% increase compared to the same month in 2023. This growth is attributed to several factors, including lower petroleum product prices, macroeconomic stabilization, and a decline in smuggling activities. When excluding furnace oil (FO), the increase in sales becomes even more pronounced.



Ex-FO sales in December 2024 reached 1.2 million tons, reflecting a robust 7% year-on-year rise. This indicates that the growth is primarily driven by consumer-oriented fuels rather than industrial usage.

One of the most encouraging signs in the report is the performance of Motor Spirit (MS), commonly known as petrol. While the report shows a slight 1% year-on-year decline in December 2024, the overall trend for the first half of the fiscal year 2025 (1HFY25) is positive. Petrol sales for the first half of the fiscal year ending June 30, 2025 totaled 3.

75 million tons, marking a 5% increase compared to the same period last year. This growth in petrol consumption is particularly significant as it primarily reflects usage in domestic vehicles. The increase suggests a recovery in consumer spending power and confidence, as more Pakistanis are likely using their personal vehicles for transportation and leisure activities.

High-Speed Diesel (HSD) sales showed even stronger growth, rising by 12% year-on-year to 573,000 tons in December 2024. This substantial increase in diesel consumption points to heightened economic activity, particularly in the transportation and industrial sectors. Diesel is a crucial fuel for trucks, buses, and agricultural machinery, making it a key indicator of overall economic health.

The rise in oil consumption, particularly in consumer-oriented fuels like petrol and diesel, paints a picture of an economy on the path to recovery. It is important to note that Pakistan remains heavily reliant on imported oil to meet its energy needs. The country is the 33rd largest consumer of petroleum globally, according to the Trade Development Authority of Pakistan (TDAP).

Despite having domestic oil reserves, Pakistan still imports a substantial amount of petroleum products, spending billions each year as local production meets only about one-fifth of its oil requirements. In the fiscal year 2024-25, Pakistan’s oil import bill has already shown a significant increase. During the first quarter (July-September 2024), oil imports surged by 15.

74%, indicating rising consumption of petroleum products. This surge in imports underscores the country’s vulnerability to global oil price fluctuations and their impact on the national economy. The Topline Securities report also provides insights into the performance of individual OMCs: Pakistan State Oil (PSO), the country’s largest OMC, saw a 4% year-on-year decline in sales to 572,000 tons in December 2024.

However, PSO maintains a significant market share, accounting for 45.99% of diesel sales and 40.54% of petrol sales.

Shell Pakistan (SHEL) experienced a 5% year-on-year increase in sales, reaching 95,000 tons. Attock Petroleum (APL) reported sales of 111,000 tons, marking a 14% year-on-year decline. Despite this, APL increased its market share in both petrol and diesel sales compared to the previous month.

HASCOL showed impressive growth, with sales increasing by 59% year-on-year to 43,000 tons. The increase in fuel consumption also has implications for government revenue. The report notes that the government has set a Petroleum Development Levy (PDL) collection target of Rs1.

28 trillion for the fiscal year 2025. As of the first half of FY25, approximately Rs557 billion (43% of the target) has been collected. This increase in PDL collection could provide the government with additional fiscal space to address economic challenges.

However, it also raises questions about the balance between revenue generation and the impact of fuel prices on consumers and businesses. While the increase in oil consumption is generally seen as a positive economic indicator, it also presents challenges for Pakistan. As a net oil importer, the country remains vulnerable to fluctuations in global oil prices.

Any significant increase in international crude oil prices could quickly erode the benefits of increased consumption and put pressure on the country’s foreign exchange reserves. Moreover, the reliance on imported fuels continues to be a drain on Pakistan’s foreign reserves. In 2022, the value of Pakistan’s petroleum imports was around $15.

23 billion. This dependency on imports for such a crucial resource underscores the need for Pakistan to diversify its energy mix and invest in domestic production capabilities. Looking ahead, analysts remain cautiously optimistic about Pakistan’s economic trajectory.

The increase in oil consumption, particularly in consumer-oriented fuels, suggests that the country may be turning a corner after a period of economic challenges. However, sustained growth will depend on a variety of factors, including global oil prices, domestic economic policies, and the country’s ability to manage its import bill. As Pakistan navigates these challenges, policymakers will need to strike a delicate balance between encouraging economic growth and managing the country’s dependence on imported fuels.

Investments in renewable energy, improvements in energy efficiency, and efforts to boost domestic oil production could all play crucial roles in securing Pakistan’s energy future and supporting long-term economic stability. Save my name, email, and website in this browser for the next time I comment. Δ document.

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