Fuel market gains momentum
In May 2025, Pakistan's Oil Marketing Companies (OMCs) recorded a robust performance, continuing their recovery trend for the third consecutive month. Total industry sales rose to 1.53 million tons, marking a 10 percent year-on-year and 5 percent month-on-month increase — the highest monthly sales figure since November 2024.
This brought the cumulative sales for the first eleven months of FY25 (11MFY25) to 14.76 million tons, reflecting a 7 percent year-on-year growth. The uptick was primarily driven by increased demand for motor spirit (MS) and high-speed diesel (HSD), supported by a combination of favourable seasonal, economic, and policy-related factors as well as decreased smuggling.
A key contributor to the growth was the seasonal rise in diesel demand due to the ongoing Kharif sowing season. Additionally, lower fuel prices—down approximately 10 percent year-on-year for MS and 8 percent for HSD—enhanced affordability, while continued anti-smuggling efforts shifted volumes from the informal to the formal sector. A low base effect from May 2024 also helped magnify the growth in reported figures. Improved macroeconomic stability and stable fuel prices since September 2024 further anchored consumer behaviour, leading to sustained demand.
Product-wise, MS sales grew by 15 percent year-on-year and 6 percent month-on-month, while HSD sales increased by 5 percent year-on-year and 8 percent month-on-month during May-25. Although furnace oil (FO) sales rose 16 percent year-on-year, they declined 5 percent month-on-month, reflecting reduced reliance on FO-based power generation. Meanwhile, high-octane blending component (HOBC) volumes surged by 134 percent year-on-year, though they were slightly down month-on-month due to an increase in petroleum development levy (PDL) rates.
Going forward, the OMC sales are expected to maintain their upward trajectory into FY26, driven by stable domestic fuel prices, and continued clampdowns on smuggling. However, the analysts caution that volumetric sales may face pressure in the immediate coming months as the seasonal demand from the Kharif season diminishes and summer school holidays reduce overall mobility. Additionally, the government's reported plan to increase the petroleum in the upcoming budget could lead to higher fuel prices, potentially suppressing demand.
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Fuel market gains momentum
In May 2025, Pakistan's Oil Marketing Companies (OMCs) recorded a robust performance, continuing their recovery trend for the third consecutive month. Total industry sales rose to 1.53 million tons, marking a 10 percent year-on-year and 5 percent month-on-month increase — the highest monthly sales figure since November 2024. This brought the cumulative sales for the first eleven months of FY25 (11MFY25) to 14.76 million tons, reflecting a 7 percent year-on-year growth. The uptick was primarily driven by increased demand for motor spirit (MS) and high-speed diesel (HSD), supported by a combination of favourable seasonal, economic, and policy-related factors as well as decreased smuggling. A key contributor to the growth was the seasonal rise in diesel demand due to the ongoing Kharif sowing season. Additionally, lower fuel prices—down approximately 10 percent year-on-year for MS and 8 percent for HSD—enhanced affordability, while continued anti-smuggling efforts shifted volumes from the informal to the formal sector. A low base effect from May 2024 also helped magnify the growth in reported figures. Improved macroeconomic stability and stable fuel prices since September 2024 further anchored consumer behaviour, leading to sustained demand. Product-wise, MS sales grew by 15 percent year-on-year and 6 percent month-on-month, while HSD sales increased by 5 percent year-on-year and 8 percent month-on-month during May-25. Although furnace oil (FO) sales rose 16 percent year-on-year, they declined 5 percent month-on-month, reflecting reduced reliance on FO-based power generation. Meanwhile, high-octane blending component (HOBC) volumes surged by 134 percent year-on-year, though they were slightly down month-on-month due to an increase in petroleum development levy (PDL) rates. Going forward, the OMC sales are expected to maintain their upward trajectory into FY26, driven by stable domestic fuel prices, and continued clampdowns on smuggling. However, the analysts caution that volumetric sales may face pressure in the immediate coming months as the seasonal demand from the Kharif season diminishes and summer school holidays reduce overall mobility. Additionally, the government's reported plan to increase the petroleum in the upcoming budget could lead to higher fuel prices, potentially suppressing demand.
