Pakistan’s petroleum consumption witnessed a robust year-on-year growth of 5% in March 2025, with total sales climbing to 1.22 million tons, according to a detailed research report by Arif Habib Ltd (AHL). Authored by equity research analysts Muhammad Iqbal and Menka Kirpalani, the report attributes the surge to a confluence of seasonal demand, price-driven consumption, and tighter control over smuggled petroleum products.

The analysts noted that Ramadan and Eid festivities played a pivotal role in this upswing, as intercity travel and economic activity surged, particularly during the latter half of the month. With March marking both the end of Ramadan and the onset of Eid holidays, road and freight traffic rose significantly, boosting demand for motor spirit (MS) and high-speed diesel (HSD).

The 5% year-on-year increase in overall petroleum sales in March was fueled by several key drivers:

Festive Mobility: Increased intercity movement due to Eid led to a spike in fuel demand, particularly MS.
Seasonal Economic Activity: The Ramadan period typically sees elevated economic activity, particularly in wholesale and retail sectors, pushing freight demand higher.
Price Reductions: A 9.7% drop in HSD prices and 8.6% decrease in MS prices compared to the previous year incentivized higher consumption.
Smuggling Curtailment: Crackdowns on Iranian petroleum smuggling contributed to higher demand for domestically supplied fuel.
Rising Vehicle Sales: A noticeable uptick in automobile sales added to the consumer base for retail fuel sales.

The product-wise breakdown paints an interesting picture. Sales of motor spirit – known colloquially as petrol, and used mostly for cars – rose by 1% YoY to 0.58 million tons, aided by reduced prices and Eid travel. High-Speed Diesel (HSD) volumes grew by 5% YoY to 0.49 million tons, supported by a price cut and increased freight demand. And surprisingly, Furnace Oil (FO sales) posted a 22% YoY growth, reaching 0.05 million tons, largely due to higher reliance on FO-based power generation amid rising electricity demand.

Month-on-month (MoM) data further showed a 7% increase in total petroleum sales compared to February, highlighting the impact of the longer month and festive season. HSD led the MoM gains with a 14% jump, while MS and FO followed with 4% and 2% increases, respectively.

On a cumulative basis, petroleum sales during the first nine months of FY25 (July–March) rose by 4% YoY, totaling 11.76 million tons versus 11.34 million tons in the same period last year. Motor spirit clocked in at 5.51 million tons, up 4% YoY. For HSD, the number was 4.98 million tons, up 9% YoY. And for FO, it was 0.51 million tons, down 39% YoY.

The dramatic fall in FO volumes for the July 2024 to March 2025 period reflects the overall shift in Pakistan’s energy generation mix, although the March bump signals temporary reversals based on energy shortages or regional demand fluctuations.

The report provided a deep dive into the performance of leading Oil Marketing Companies (OMCs):

For Pakistan State Oil (PSO), March 2025 sales dropped 14% YoY to 0.51 million tons. Sharp declines were recorded in MS (-21%), HSD (-12%), and FO (-27%). 9MFY25 sales also fell 7% YoY, with PSO’s market share shrinking from 50% in 9MFY24 to 45% this year.

At Attock Petroleum Ltd (APL), March sales rose 2% YoY, totaling 0.11 million tons. For the first nine months of fiscal year 2025 sales declined by 10% YoY, with market share dropping from 10% to 9%.

Shell Pakistan Ltd (SHEL) posted a 7% YoY decline in March volumes. Its market share remained stable at 7%, but 9MFY25 volumes were down 18% YoY.

Meanwhile, Hascol Petroleum was a standout performer in the period, Hascol registered a 95% YoY increase in March sales. For the first nine months of fiscal year 2025, volumes grew 6% YoY, indicating a gradual turnaround for the company. Market share remained flat at 4%, but momentum has clearly returned.

Gas and Oil Pakistan (GO) was the big gainer in market share. GO jumped from 3% in the first nine months of fiscal year 2025 to 10% in 9MFY25, reflecting aggressive expansion and better distribution reach. However, its sales in March dipped 9.9% YoY, hinting at volatility in its monthly performance.

The report also shed light on fiscal developments linked to petroleum consumption. Petroleum Development Levy (PDL) collections stood at PKR 819 billion in the first nine months of FY25 — averaging PKR 91 billion per month.

The federal government has set a PDL target of PKR 1,281 billion for FY25, translating to a monthly target of around PKR 107 billion. Given current trends, the government may miss its annual target unless consumption continues to accelerate in the final quarter.

Despite the March surge, analysts at Arif Habib Ltd. remain cautious about the sector’s medium-term prospects. Key challenges include volatility in global oil prices. Unpredictable crude markets could impact local pricing, affecting consumer demand.

However, upside drivers such as better economic recovery, infrastructure investment, and continued enforcement against smuggled fuel could offer support to the formal fuel marketing sector.

Iqbal and Kirpalani note in their commentary that “March’s numbers were exceptional due to favorable seasonal and pricing factors, but structural challenges remain.” They emphasize that while sales spikes during festivals and travel seasons are welcome, sustainable demand growth will depend on macroeconomic stability and regulatory clarity.

The March 2025 petroleum sales data offers a much-needed boost to Pakistan’s oil and gas marketing sector. While celebratory spending and lower pump prices provided temporary momentum, the path ahead remains uncertain. Market consolidation, evolving energy trends, and fiscal pressures will all play a role in shaping the industry’s trajectory over the coming quarters.

Still, the surge reflects the resilience of demand during festive and high-mobility periods, and it underscores the potential of the sector when supported by sensible pricing and supply chain discipline.

As the government eyes further fiscal space through levies and the economy slowly climbs out of stagnation, how the sector evolves in the post-Ramadan months will be a key signal of broader economic sentiment and household resilience.