KARACHI: Domestic oil industry sales fell by 1 percent year-on-year (YoY) in March 2017, taking cumulative growth to 12 percent YoY in nine months of Fiscal Year 2016-17 (FY17). During the month, Motor Spirit (MS) uptick of 3 percent YoY and 18 percent YoY in nine months of FY17 while High Speed Diesel (HSD) volumes increased by 4 percent YoY and 14 percent YoY in nine months of FY17. Furnace Oil (FO) sales dropped by 9 percent YoY and 9 percent YoY in nine months of FY17 due to inventory pile up with power generation companies. During the month, Pakistan State Oil (PSO) and Shell underperformed where major brunt was witnessed in white oil segment. In contrast, Hascol and Attock Petroleum Limited (APL) outshined the industry in overall product mix. Retail segment has been a key force in driving Oil Marketing Companies (OMCs)’ volumes consistently; however the trend eased off in March partially on slight increase in petroleum prices. Headline MS growth was up marginally by 3 percent YoY, but Arsalan Siddiqui, an analyst at Foundation Securities believes that it is largely to do with high base year effect that is also depicted from 12 percent MoM growth. Similarly, HSD growth also slowed during the month to 4 percent YoY attributable to delayed sowing in Kharif season on water shortage in River Indus that muted demand from agriculture sector, added Siddiqui. “However, we remain positive in white oil segment growth going forward owing to economic activities revival, increasing motorization and improving highway connectivity,” said Siddiqui. FO volumes registered a decline of 9 percent YoY in March 2017 on the back of higher inventory available with power producers and cash flow concerns of power chain, hampering demand of black oil. In nine months of FY17, MS volumes surged by 18 percent YoY due to sustained lower oil prices, high auto sales and improving road network. HSD depicted a growth of 14% due to increasing construction and economic activities. Whereas, FO volumes elevated by 9 percent YoY higher FO based power generation. “We remain positive on sector mainly led by long term China-Pakistan Economic Corridor (CPEC) related demand of transit movement. Increased white oil demand should be able to compensate for lower demand of FO from power sector subsequent to LNG/coal based power plants adding to the system going forward,” he said.