Karachi: The oil marketing companies (OMC) in Pakistan reported a 5% year-on-year increase in sales for the first five months of fiscal year 2025, though achieving the Petroleum Development Levy (PDL) target continues to be challenging. In November 2024 alone, the OMCs registered a sales volume of 1.6 million tons, marking a 15% increase from the previous year and a 6% rise compared to the previous month.
According to JS Global, the breakdown of sales by product category showed a 17% year-on-year increase in Motor Spirit (MS) volume, and a 21% rise in Hi-Speed Diesel (HSD) volume. However, sales of Furnace Oil (FO) declined by 55% compared to the same period last year. Despite the uptick in sales, the OMCs face hurdles in meeting the PDL target, primarily due to the government’s decision to defer increases in the levy charge.
The PDL collection for November 2024 was estimated at Rs467 billion, which is 4% below the monthly target required to achieve the fiscal year 2025 PDL target of Rs1.28 trillion. To meet the annual PDL target, a volumetric growth of 23% year-on-year would be necessary in the remaining months of the fiscal year, assuming the PDL charge is increased by Rs10 per liter from January 2025 to Rs70 per liter. Alternatively, a 41% year-on-year volume growth would be needed if the PDL charge remains at Rs60 per liter for the fiscal year 2025. Given the low likelihood of these growth rates, a shortfall in PDL collection is expected, which could impact the fiscal and primary balance targets.
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