KARACHI: Pakistan's oil marketing companies (OMCs) sold 1.3 million tons of petroleum products in August, down 3% from a year earlier and a much steeper 16% from July. Why? Fuel prices, mostly. Though the numbers underneath tell a slightly messier story than that one-line explanation suggests.

Motor Spirit averaged around Rs334 a litre in August. That's 26% higher than a year back, 6% above July. High-Speed Diesel had it worse roughly Rs379 a litre, up 36% YoY, 11% MoM. Prices climbed, and buyers pulled back. The relationship is hard to miss.

Pakistan Diesel Sales Crash 32%

Petrol held up okay, all things considered down just 1% YoY, though it did slip 9% MoM to 666,000 tons. Diesel had a rougher month. Pakistan diesel sales fell 19% YoY, while month-on-month the number was brutal: down 32%, landing at 422,000 tons.. Worth sitting with that figure for a second. Trucks run on diesel. So does most of the country's farm machinery. And when diesel gets this much more expensive, transporters and farmers feel the squeeze long before it disappears from the broader economy.

Take furnace oil out of the picture and things look worse, not better. Ex-FO sales dropped 9% YoY and 23% MoM to 1.2 million tons, showing that weakness extended deep into Pakistan's core petroleum demand.

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Furnace oil, meanwhile, went the other direction entirely up fivefold YoY, up 26% MoM. None of that has much to do with pump prices. Punjab's LNG shortages and worsening loadshedding pushed power plants toward FO as a fallback fuel source, which pulled volumes back into the domestic market instead of going out through export channels.

Individual companies split off from each other quite a bit this month. Attock Petroleum actually grew 8% YoY, even with a 5% MoM dip to 121,000 tons enough to nudge its market share up 119 basis points, to 9.61%. PSO grew 4% YoY but fell 19% MoM to 570,000 tons, and its market share dropped 131 basis points to 45.21%. Part of the decline came from substantially lower furnace oil volumes, which weighed on PSO's overall market share.

Wafi Energy posted 107,000 tons up 1% YoY, down 18% MoM. Hascol reported 35,000 tons, down 16% both YoY and MoM. That made Hascol the only listed player in the comparison to suffer a year-on-year sales decline in August.

Analysts are still projecting 8-10% growth for OMC sales through FY27, on the assumption that prices settle down and demand recovers. Two months into the fiscal year, cumulative sales sit 10% higher YoY at 2.8 million tons so the yearly trend hasn't broken, even if August gave the sector a rough, price-driven gut check on the monthly numbers.