- The government collected Rs 907 billion through the petroleum levy (PDL) in 11 months.
- Oil marketing companies reported a 7% year-on-year increase in sales in May 2024.
- Diesel sales grew by 18% in May due to the harvest season and price reductions.
Karachi: The government has successfully surpassed its petroleum development levy (PDL) collection target, amassing Rs 907 billion against the target of Rs 869 billion within the first 11 months of the fiscal year, according to a report by the Express Tribune.
Surge in Petroleum Product Demand
This notable achievement is attributed to a rise in demand for petroleum products, which reached a nine-month high of 1.4 million tons in May 2024. This surge in demand was driven by a reduction in petroleum prices. Total consumption from July to May 2023–24 amounted to 13.8 million tons, as reported by Topline Research.
Insights from Topline Research
Myesha Sohail, an analyst at Topline Research, noted that the government collected Rs 907 billion through the PDL over the 11 months of FY24. Sohail projected that the total collection could potentially reach between Rs 990 billion and Rs 1 trillion, based on the average monthly collections of Rs 80–85 billion. The PDL is currently set at Rs 60 per liter for both petrol and diesel.
Oil Marketing Companies’ Sales Data
Oil marketing companies (OMCs) reported sales of 1.39 million tons in May 2024, marking a 7 percent year-on-year increase and a 26 percent rise month-on-month. This growth was significantly driven by an 18 percent year-on-year increase in diesel sales. Overall, petroleum sales for the first 11 months of the fiscal year totaled 13.8 million tons, reflecting a 9 percent decrease compared to the previous year.
Diesel Sales and Market Dynamics
Diesel sales saw substantial growth in May 2024, rising by 18 percent to 643,000 tons compared to May 2023. This increase was mainly due to the harvesting season and a price reduction of Rs 16.3 per liter. Additionally, a crackdown on the smuggling of petroleum products boosted high-speed diesel (HSD) sales.
Motor Spirit and Furnace Oil Sales
Motor spirit (MS/petrol) sales increased by 1 percent year-on-year and 14 percent month-on-month to 607,000 tons, bringing the 11-month total to 6.4 million tons, a 5 percent decrease year-on-year. Petrol prices saw a decrease of Rs 20.84 per liter in May 2024. In contrast, furnace oil sales dropped by 29 percent year-on-year to 69,000 tons, due to reduced power generation from furnace oil-based plants.
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The government’s ability to exceed its PDL collection target is a significant achievement, reflecting the effectiveness of its fiscal policies amid fluctuating market conditions. With continued monitoring and strategic adjustments, the government aims to maintain steady revenue streams while addressing market dynamics.
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