Iranian diesel captures 25pc local market, says S&P
he heavy influx of smuggled Iranian oil has captured 25 to 30 per cent of the diesel market in Pakistan depriving the national exchequer of billions of rupees in taxes and duties and forcing the domestic refiners to slash their production.
A detailed report issued by the S&P Global Commodity Insights quoting several officials, analysts and oil producers, said cheaper Iranian diesel has rapidly gained popularity among Pakistani consumers looking for affordable fuels.
A shortage of dollar reserves and faltering Pakistani currency also kept fuel prices high in the country, prompting small private trading companies and individuals with a business network in Iran to purchase heavily discounted diesel, said industry analysts, including Tahir Abbas, head of research at Karachi-based broking firm Arif Habib Ltd.
Pakistan’s inflation rate surged to 36.4 per cent in April, the highest since December 1973.
Gasoline sales in Pakistan fell 24 per cent from a year earlier to 580,000 tonnes in April, while diesel sales dropped 50 per cent year-on-year (YoY) to 460,000 tonnes and fuel oil consumption plunged 83 per cent to just 70,000 tonnes during the period, the latest data from Oil Companies Advisory Council (OCAC) and oil marketing companies showed.
Industrial, transportation and agricultural activities have slowed as inflation rates surged. Gasoline sales during the first 10 months of the fiscal year fell 17pc to 6.173 million tonnes, while diesel sales tumbled 28 per cent YoY to 6.173m tonnes, OCAC data showed.
According to the report domestic refiners in Pakistan are facing tepid consumer demand because of a sharp slowdown in economic activity, with the country’s oil product sales in April tumbling 46 per cent YoY to 1.17m tonnes, or about 8.8m barrels, according to OCAC.
