KARACHI: In February 2025, oil marketing companies (OMCs) in Pakistan offered discounts on high-octane blending components (HOBC), which led to a record-high sale of approximately 33,000 metric tons. This encouraged commuters to purchase better quality fuel instead of the cheaper MS petrol.
According to Optimus Capital Management (OCM), who cited statistics from the Oil Companies Advisory Council (OCAC), the sale of HOBC was around 15,000 metric tons in September 2024. Since then, sales have skyrocketed, reaching a new all-time high in February 2025.
“Notably, February 2025 saw record-high HOBC sales for any month, as OMCs introduced significant price discounts, reflected in the price gap between MS and HOBC,” commented OCM analyst Zayan Babar Khan on Tuesday in a commentary on monthly oil sales.
Sales of MS/petrol (Euro5 Premier) at Rs255.63 per litre and HOBC (Euro5 Octane+) at Rs260.35 per litre during the day indicate that the disparity between the two products shrank to less than Rs5 per litre, according to the state-owned oil marketing organization.
In February 2024, the difference in price was almost Rs18/litre.
Vehicles of a higher economic and political class use high-octane mixed fuel. The major use of HOBC is to improve engine performance and mileage compared to regular petrol (motor fuel).
Unlike diesel and petrol in Pakistan, where the Oil and Gas Regulatory Authority (Ogra) has no control over pricing, the oil marketing companies (OMCs) import the fuel and determine its price. Consequently, the prices of high-octane (HOBC) petrol can vary significantly even within the same city.
Petrol and diesel demand fell 18% month-on-month in February 2025, falling to 1.14 million metric tons, as a result of an 18% month-on-month rise in product prices compared to January.
The local research houses cited statistics from the Oil Companies Advisory Council (OCAC) to claim that oil consumption amounted to 1.38 million tons in January 2025.
According to a combined analysis by Muhammad Iqbal and Menka Kirpalani of Arif Habib Limited (AHL), the significant drop in sales of petroleum products was caused by a “fall in petroleum consumption amid higher price of MS (petrol) and high-speed diesel.”
Motor gasoil (MS/petrol) prices increased by 2.23 % to 256.33 rupees per litre in February compared to January, according to OPC analyst Khan. HSD prices increased by 6.30 rupees per litre, to 267.0 rupees per litre, “due to higher Brent prices, and exchange rate adjustment on MS and HSD.”
Demand for the commodity fell in February due to a number of factors, including fewer days in the month compared to January and less reliance on power generation fuelled by furnace oil, according to AHL analysts.
Statistics showed that compared to January, sales of motor spirit (petrol) dropped 11% to 0.56 million metric tons in February. With a 29% decline, sales of high-speed diesel reached 0.43 million tons. Compared to January, furnace oil usage dropped 9% to 0.05 million tons.
However, when comparing February of this year to the same month last year, the demand for petroleum products improved by 2% year over year.
“Resurgence of demand for MS amid lower price of petrol (on a year-on-year basis), curbs on smuggled petroleum from Iran, jump in automobile sales, and higher demand for FO-based power generation.” (The two analysts given the surge in sales to these factors.)
Demand for high-speed diesel (HSD) fell 4% in February compared to the same month last year, despite an overall uptick in sales.
With fewer rains during the rabi harvest, crop yields were lower, which may have contributed to the decline in HSD sales, according to Khan.
The product sales finally leveled off at 0.43 million tons in February 2025, down from 0.45 million tons in February 2024.
February saw a 7% year-on-year increase in sales of furnace oil and a 2% increase in MS dispatches.
In the first eight months of the current fiscal year 2024-25, sales of petroleum products climbed by 4% year-on-year, reaching 10.55 million tons from 10.18 million tons in the same period last year.
Sales of furnace oil fell, but those of gasoline and high-speed diesel showed a rise. Motor spirit had volumetric sales of 4.93 million tons, HSD of 4.49 million tons, and FO of 0.46 million tons.