Pakistan OMC Sector Earnings Rise 144% in 1QFY27
Pakistan’s OMC industry sales rose 6 per cent YoY in 1QFY27. Motor spirit (MS) sales increased 4 per cent, while high-speed diesel (HSD) sales declined 3 per cent
KARACHI: Pakistan’s oil marketing companies (OMCs) recorded a 144 per cent year-on-year (YoY) increase in earnings to Rs32.2 billion in the first quarter of fiscal year 2026-27, driven by higher petroleum prices, improved sales and significant inventory gains.
According to sector data compiled by analysts at Arif Habib Securities, higher petroleum prices supported revenue growth, while inventory gains boosted gross margins. The sector’s sales increased 18 per cent YoY to Rs1.006 trillion during the quarter.
The improvement came amid rising international oil prices and supply disruptions linked to geopolitical tensions, including the ongoing US-Iran conflict.
Petroleum Prices Drive OMC Sector Growth
Pakistan’s OMC industry sales rose 6 per cent YoY in 1QFY27. Motor spirit (MS) sales increased 4 per cent, while high-speed diesel (HSD) sales declined 3 per cent.
In comparison, Pakistan State Oil (PSO) recorded stronger sales volumes, with MS sales rising 25 per cent and HSD volumes increasing 12 per cent. Attock Petroleum Limited (APL) reported a 1 per cent increase in MS volumes, while its HSD volumes fell 15 per cent.
Average MS prices increased 32.5% YoY to Rs348.95 per litre. Meanwhile, average HSD prices rose 43.5% to Rs385.56 per litre.
Higher ex-refinery prices, supported by rising international gasoline and gasoil prices, contributed to the increase in domestic petroleum prices.
Gross Margins Improve on Inventory Gains
The OMC sector’s gross margin increased to 6.8% in 1QFY27, while gross profit rose 84% YoY to Rs69.3 billion.
Inventory gains of approximately Rs43 billion played a major role in the improvement, as higher petroleum prices increased the value of existing fuel stocks.
However, the sector’s finance costs also increased 5% YoY during the quarter due to higher interest rates and increased short-term borrowings by PSO. The sector’s effective tax rate stood at 37.6% in 1QFY27.
PSO Earnings Rise 172% to Rs25.6 Billion
Pakistan State Oil reported earnings of Rs25.6 billion for 1QFY27, representing a 172% YoY increase. Earnings per share (EPS) stood at Rs54.44. The company’s sales increased 15% YoY to Rs846.1 billion, supported by higher petroleum prices and stronger MS and HSD sales volumes.
PSO recorded estimated inventory gains of Rs35 billion during the quarter, helping improve its gross margins and overall profitability. However, finance costs rose 6% YoY to Rs6.3 billion due to higher interest rates and increased short-term borrowings.
PSO’s receivables increased by Rs1.5 billion quarter-on-quarter to Rs416 billion in September 2026. Despite this increase, receivables have declined by Rs132 billion since December 2023. The company’s market share improved to 46.4% in 1QFY27, compared with 41.8% in the corresponding period last year.
APL Profit Increases 74% to Rs6.6 Billion
Attock Petroleum Limited reported earnings of Rs6.6 billion in 1QFY27, up 74% YoY. Its earnings per share stood at Rs53.36.
APL’s sales increased 36% YoY to Rs160.5 billion, despite declines in MS and HSD sales volumes of 2% and 4.5%, respectively. Higher petroleum prices supported the company’s revenue growth.
The company’s gross margin improved to 7.4% from 6.4% a year earlier, mainly due to inventory gains of approximately Rs8 billion during the quarter.
APL’s net finance income edged down to Rs906 million from Rs922 million in the same period last year, primarily due to lower line-fill costs, according to the analysis.
The company’s market share also increased by 0.45 percentage points to 8.8% during 1QFY27.
LNG Supply Disruptions Affect Cargo Handling
Pakistan’s liquefied natural gas (LNG) segment faced supply challenges during the quarter amid geopolitical tensions.
A total of eight LNG cargoes were handled in 1QFY27, compared with 28 cargoes in the corresponding period last year. PSO accounted for three cargoes during the quarter.
Meanwhile, the delivered ex-ship (DES) LNG price increased to $11.09 per million British thermal units (MMBtu), up from $8.01 per MMBtu a year earlier. The reduction in cargo volumes reflected supply disruptions linked to geopolitical developments, while higher LNG prices added to market pressures.
Outlook for Pakistan’s OMC Sector
According to the report of Menka Kirpalani and Zayan Babar Khan, analysts at Arif Habib Securities, Pakistan’s OMC sector delivered strong earnings growth in 1QFY27, supported by higher petroleum prices, improved gross margins and substantial inventory gains.
PSO benefited from stronger sales volumes and increased market share, while APL recorded higher revenue and improved gross margins despite lower fuel volumes, they said.
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