Islamabad, Apr 8, 2025: Diesel Inventory Peaks as Pakistan’s energy sector faces a mounting challenge driven by inaccurate diesel demand forecasts.
A significant mismatch between projected and actual consumption has left Pak Arab Refinery Limited (Parco) the country’s largest refinery in a difficult position, with unsold diesel stockpiles reaching unprecedented levels.
This crisis, if not addressed promptly, could disrupt refinery operations and create serious setbacks for domestic fuel production.
The inflated demand estimate issued by the Oil and Gas Regulatory Authority (OGRA) created space for foreign imports, reducing reliance on domestically refined diesel. Diesel Inventory Peaks due to this imbalance, as local refineries.
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Particularly Parco a strategic partnership between Pakistan and Abu Dhabi grapple with approximately 100,000 tons of surplus high-speed diesel.
Industry insiders reveal that crude oil reserves have surged to nearly 386,000 metric tons, primarily because oil marketing companies (OMCs) have slowed down their lifting of refined fuel from local sources.
Although current regulations require OMCs to prioritize purchasing from domestic refineries, OGRA’s decision to permit two OMCs to import up to four fuel cargoes monthly has further compounded the issue.
In March 2025, OGRA estimated diesel demand at 601,300 tons significantly higher than the industry’s projection of 550,000 tons. However, actual diesel sales stood at just 487,000 tons, exacerbating the oversupply crisis.
Similarly, petrol consumption was overestimated, with OGRA projecting 628,250 tons, while actual sales were recorded at only 577,000 tons.
As Diesel Inventory Peaks, discussions between refineries and OGRA are now underway to reinforce the obligation of OMCs to uplift domestic fuel.
On the brighter side, Pakistan’s total oil product sales rose to 1.2 million tons in March 2025 a 5% increase year-on-year (YoY) and a 7% month-on-month (MoM) jump.
This rise was aided by a drop in retail prices and a low comparison base from previous months. Over the first nine months of FY25, total volumes touched 11.77 million tons, a 4% YoY improvement.
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Among key players, Attock Petroleum’s diesel sales rose 14% MoM, helping it secure an 8.97% diesel market share. PSO also reported strong month-on-month growth of 9%, achieving a 43.08% market share in petrol. Meanwhile, Hascol Petroleum posted an impressive 95% YoY growth.
Despite these individual gains, the broader issue remains: Diesel Inventory Peaks because of flawed forecasting and regulatory decisions.
