OMC sales climb for third straight month: can the momentum hold?

The oil marketing sector in Pakistan is showing signs of resilience, with volumetric sales for May 2025 marking the third consecutive monthly increase. Total OMC sales clocked in at 1.5 million tons, up 10% year-on-year and 5% month-on-month, reaching their highest level since November 2024.

This resurgence is being driven by improving fuel consumption trends, rising summer demand, and stable retail prices, all of which bode well for investors in key OMC players like PSO and APL.

Retail fuels drive the surge

Retail fuel categories, Motor Spirit (MS), High-Speed Diesel (HSD), and High-Octane Blending Component (HOBC), led the increase:

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• MS up 15% YoY
• HSD up 5% YoY
• HOBC up 5% YoY

A combination of stable prices and increased agricultural diesel usage, spurred by hot weather and irrigation needs, supported the gains. During 11MFY25, industry retail volumes grew by 10% YoY, highlighting the sector’s underlying demand strength.

PSO maintains leadership amid challenges

While Pakistan State Oil (PSO) posted a 3% YoY decline in May sales, it managed a 3% sequential improvement. PSO maintained a commanding 41.9% market share, though this was down from 47.9% in May 2024. The slip was due to intensified competition from players like GO and WAFI, whose aggressive retail expansion is eating into PSO’s share.

Still, PSO’s HSD and MS volumes saw sequential gains, reflecting short-term recovery.

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Private players gain momentum

Private OMCs are rapidly scaling up:

• HASCOL grew sales by 31% YoY
• WAFI posted a 23% YoY increase
• GO more than tripled its share to 11.1% in May, up from 3.8% last year

These gains were led by expanding retail networks and an aggressive push in fuel volumes, especially in diesel and premium gasoline categories.

APL sees mixed performance

Attock Petroleum Limited (APL) saw a modest 2% YoY decline in May sales but improved 9% MoM. APL continues to face stiff supply-led competition, especially in the retail space. Over 11MFY25, APL’s volumes declined 7% YoY, but the stock remains attractive from a dividend and valuation perspective.

Government ramps up petroleum levy collection

OMC sales growth has resulted in significant fiscal inflows. The Petroleum Development Levy (PDL) collection reached PKR 1.05 trillion in 11MFY25. With one month to go in FY25, the expected PDL haul is projected at PKR 1.2 trillion, just shy of the PKR 1.28 trillion annual target.

Recent moves, such as the ECC’s decision to raise the PDL ceiling to PKR 90/liter, and proposals for a carbon tax of PKR 3–5/liter, could affect future demand patterns.

Investment outlook: ‘BUY’ on PSO and APL

Despite risks from higher levies and taxes, analysts maintain a bullish outlook on the sector, particularly for PSO and APL. Their strong fundamentals, expected revision in OMC margins during 4QFY25, and improved macro outlook support the case for long-term gains.

The OMC sector is showing signs of revival, supported by stronger volumes, stable pricing, and healthy fiscal collections. As Pakistan’s economy moves toward gradual stabilization, investors may find compelling value in top OMC names like PSO and APL, especially ahead of potential margin revisions and resolution of circular debt.

Source: AKD Research

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →