Eco­nomic slow­down hits fuel de­mand in Oman mar­ket

Ex­ports of petroleum prod­ucts jump on higher re­fin­ery out­put

Muscat Daily - - FRONT PAGE -

The slow­down in eco­nomic ac­tiv­ity and fuel price re­forms that were in­tro­duced in early 2016 have im­pacted de­mand growth of petrol and gas oil

The slow­down in eco­nomic ac­tiv­ity and fuel price re­forms that were in­tro­duced in early 2016 have im­pacted de­mand growth of petrol and gas oil in Oman and other GCC mar­kets.

To­tal do­mes­tic sales of petrol (M91 and M95) de­creased 4.9 per cent to 11.21mn bar­rels in the first half of 2017 com­pared with 11.78mn bar­rels in the same pe­riod of last year, ac­cord­ing to statis­tics re­leased by the Na­tional Cen­tre for Statis­tics and In­for­ma­tion (NCSI).

Do­mes­tic sales of gas oil fell by seven per cent to 8.14mn bar­rels in the first half of this year against 8.77mn bar­rels in the first half of 2016.

Avi­a­tion fuel oil sales, how­ever, grew by nine per cent to 2.37mn bar­rels, the NCSI statis­tics showed.

‘The slow­down in eco­nomic ac­tiv­ity and the lim­ited price re­forms that were in­tro­duced in early 2016 have im­pacted en­ergy de­mand growth in the GCC re­gion’, Arab Petroleum In­vest­ments Cor­po­ra­tion (APICORP) said in its en­ergy re­search note re­cently.

APICORP said fur­ther price re­form will likely have a more sig­nif­i­cant im­pact on do­mes­tic de­mand in the GCC coun­tries, pos­si­bly free­ing up more re­fined prod­ucts for ex­ports.

The NCSI statis­tics showed that there has been a sig­nif­i­cant growth in Oman’s re­fin­ery out­put this year de­spite a de­cline in lo­cal de­mand. To­tal pro­duc­tion of petrol (M91 and M95) rose 3.2 per cent to 12.63mn bar­rels in the first half of this year com­pared with 12.23mn bar­rels last year, and gas oil pro­duc­tion jumped by 13 per cent to 11.78mn bar­rels.

As the re­fin­ery out­put sig­nif­i­cantly ex­ceeded lo­cal de­mand, Oman’s ex­port of petrol (M91) jumped to 1.1mn bar­rels in the first half of 2017 from just 67,000 bar­rels in the same pe­riod a year ago. At the same time, ex­port of gas oil more than dou­bled to 3.55mn bar­rels from 1.65mn bar­rels in the first half of last year.

‘The slow­down in de­mand growth in the re­gion is free­ing up more re­fined prod­ucts for ex­port, com­pet­ing with Asian re­finer­ies in more con­gested prod­ucts mar­ket’, APICORP said.

It said the surge in GCC re­fin­ing ca­pac­ity in the past decade was mainly a re­sponse to ris­ing do­mes­tic de­mand but also an ef­fort to di­ver­sify away from crude ex­ports and in­te­grate the crude, re­fin­ing and petro­chem­i­cal in­dus­tries.

‘It is also hav­ing an im­pact on trade flows. The year 2016 marked a mile­stone for the GCC re­gion as it be­came a net ex­porter of all re­fined prod­ucts, although a mar­ginal ex­porter of petrol’, APICORP added.

The weak fuel de­mand is hurt­ing Oman’s oil mar­ket­ing sec­tor firms. The sul­tanate’s three oil mar­ket­ing com­pa­nies re­ported sig­nif­i­cant de­clines in their net prof­its for the first half of 2017 de­spite growths in rev­enue due higher fuel prices.

Oman Oil Mar­ket­ing Co’s net profit fell 28 per cent to RO3.63mn for the six months pe­riod ended June 30, 2017 com­pared to RO5.02mn in the same pe­riod a year ago.

Al Maha Petroleum Prod­ucts Mar­ket­ing Co re­ported a 40 per cent year-on-year de­cline in first half net profit to RO2.72mn, while Shell Oman Mar­ket­ing Co’s net profit fell 25.6 per cent to RO6.55mn.

(Mus­cat Daily)

To­tal do­mes­tic sales of petrol (M91 and M95) de­creased 4.9 per cent to 11.21mn bar­rels in the first half of 2017

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