Petroleum Levy Collection Target Surpassed

Islamabad: The government has exceeded its target by collecting over Rs900 billion in petroleum development levy (PDL) on the sale of petroleum products within 11 months of the current fiscal year, surpassing the full-year collection goal of Rs869 billion.

In May 2024, demand for petroleum products surged to a nine-month high at 1.4 million tons following a reduction in prices, resulting in total consumption reaching 13.8 million tons in July-May 2023-24, according to Topline Research. Analyst Myesha Sohail from Topline Research reported that tax collection through PDL reached Rs907 billion in 11 months of FY24, projecting a potential collection of Rs990 billion to Rs1 trillion based on a monthly average of Rs80-85 billion.

The government imposes a PDL of Rs60 per litre on the sale of both petrol and diesel.

Sohail noted that oil marketing companies (OMCs) recorded sales of 1.39 million tons in May 2024, the highest in nine months, up 7% year-on-year and 26% month-on-month, driven by an 18% year-on-year surge in diesel sales.

However, petroleum sales in the first 11 months totaled 13.8 million tons, marking a 9% decrease compared to the same period last year.

Sohail highlighted a significant improvement in diesel sales in May 2024, with a growth of 18% at 643,000 tons compared to the same month last year, attributed to the harvesting season and a reduction in prices by Rs16.3 per litre in the month. Additionally, a crackdown on the smuggling of petroleum products led to the recovery of high-speed diesel (HSD) sales.

Motor spirit (MS/petrol) sales saw a 1% year-on-year increase and a 14% month-on-month rise to 607,000 tons in May 2024, bringing 11-month sales to 6.4 million tons, down 5% year-on-year. Petrol prices experienced a drop of Rs20.84/litre in May 2024. Furnace oil sales declined by 29% on a yearly basis to 69,000 tons, attributed to reduced power generation from furnace oil-based power plants.

Among the listed companies, Attock Petroleum Limited (APL) witnessed sales of 140,000 tons in May 2024, up 14% year-on-year and 42% month-on-month, primarily due to increased HSD demand.

APL’s market share in HSD sales rose by 150 basis points month-on-month to 9.8%.

Pakistan State Oil (PSO) recorded a year-on-year sales increase of 11% and a month-on-month rise of 19%, with sales reaching 665,000 tons in May 2024. PSO’s market share in HSD and MS stood at 49.9% and 43.8%, respectively, down 170 basis points and 290 basis points month-on-month.

Shell Pakistan experienced a 13% year-on-year and 23% month-on-month sales increase to 100,000 tons. Its market share remained largely unchanged in both MS and HSD.

Hascol Petroleum's sales reached 41,000 tons in May 2024, up 51% month-on-month and down 39% year-on-year. Its market share in MS and HSD improved by 90 basis points and 30 basis points month-on-month to 4% and 2.6%, respectively, during May 2024.