HSD demand surges amid harvest season

KARACHI: Demand for high-speed diesel (HSD) has surged in October, driven by anti-smuggling actions and the start of the harvesting season.

HSD sales have reached 609,000 metric tonnes (MT) so far this month, compared to 490,000 MT for the entire month of September.

The refining sector views this increase as a positive development for Pakistan’s formal oil industry, crediting government actions that have curbed HSD smuggling from Iran. However, industry representatives disagree with the recent decision to allow private sector imports of HSD. “Imports by Pakistan State Oil (PSO) are sufficient to meet the shortfall between local production and demand,” an official from a local refinery told The News.

According to a breakdown of HSD sales by oil marketing companies (OMCs), PSO sold 298,000 MT of HSD, followed by Gas & Oil (GO) with 68,000 MT, TPPL with 53,000 MT, Attock Petroleum with 46,000 MT, and SPL with 36,000 MT. Last month, PSO sold 219,000 MT, GO 59,000 MT, TPPL 47,000 MT, APL 44,000 MT, and SPL 29,000 MT.

With rising OMC sales, PSO has been permitted to import 190,000 MT of HSD, while GO has been allowed to import 76,000 MT, which exceeds a full month’s typical sales for the company.

The refinery sector has expressed opposition to the Oil & Gas Regulatory Authority’s (Ogra) decision to allow GO to import HSD, arguing that PSO’s imports would be sufficient to cover the shortfall between local production and demand.

Ogra, however, defended its decision, noting that October 2024 HSD sales have surpassed projections by 21 per cent, due to the federal government’s anti-smuggling drive and the start of the agricultural season. As a result, stock levels -- previously reported as ample by refineries -- are now sufficient for only 19 more days of national consumption.

In the monthly Product Review Meeting held on October 22, 2024, Ogra approved imports of approximately 266,000 MT of HSD to cover the November deficit and replenish depleted stocks. “November is a critical month due to the agricultural season, and Pakistan’s major supply source, Parco -- which accounts for nearly 50 per cent of the country’s refinery production -- will be offline for 40 days,” Ogra stated.