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COVID-19: Petrol, diesel sales plummet amid weak demand

29 Sep 2020

The COVID-19 pandemic has caused one of the biggest declines in fuel consumption in history as the lockdowns and restrictions to curb the spread of the virus kept motorists off the roads for past many months. The closure of many economic activities, mainly during the second quarter, resulted in a dramatic reduction in sales volume of petrol, diesel and aviation fuel in Oman.

Domestic sales of M91 grade petrol fell 27 per cent year-on-year to 5.13mn barrels in the first eight months of 2020, while sales of M95 grade petrol dropped 15 per cent to 7.17mn barrels during the January–August period of this year, the statistics released by National Center for Statistics and Information (NCSI) showed.

Diesel sales also declined by 13 per cent year-on-year to 8.9mn barrels during the first eight months of this year. Sales of aviation fuel, due to travel restrictions and closure of airports, plummeted by 59 per cent to 1.32mn barrels during the January–August period of 2020 compared to 3.24mn barrels volume in the corresponding period of 2019.

Affected by lower domestic consumption and weak export demand for refined petroleum products, Oman’s refinery output was sharply reduced this year. The production of M91 fell 34 per cent to 6.32mn barrels during the January–August period, while the M95 output decreased 12 per cent to 7.9mn barrels. Aviation fuel output also sharply fell by 47 per cent to 5.35mn barrels. The production of diesel, however, increased 19 per cent to 22.06mn barrels this year, mainly due to an increase in export sales.

With plummeting sales in retail and aviation fuel segments amid COVID-19 crisis, Oman’s all three oil marketing companies reported losses and sharp declines in revenues this year.

Oman Oil Marketing Company reported a 22.6 per cent decline in sales revenue for the first half of 2020 at RO221.52mn against RO286.11mn turnover recorded in the same period of 2019. The company announced a net loss of more than RO377,000 for the first half of this year compared to a net profit of RO3.18mn in the same period of 2019.

‘The operations in the second quarter of 2020 remained very challenging due to COVID-19 and additional license fee cost. The drop in turnover comes primarily from the loss of volume in retail and aviation businesses due to COVID-19 led travel restrictions,’ Oman Oil Marketing said in its second quarter report.

Al Maha Petroleum Products Marketing Company’s revenue plunged 27 per cent to RO171.61mn for January – June period of 2020 from RO233.9mn in the same period of 2019. The company reported a net loss of RO98,000 for the first six months of this year against a net profit of RO2.04mn in the same period of last year.

‘The second quarter of 2020 has been the most challenging period that we have encountered in the last two decades of our business due to the COVID-19 pandemic. The sharp fall in the road and air travel due to the lockdown in the late first quarter and large period of the second quarter saw a significant decrease in fuel consumption by customers affecting our performance,’ Al Maha Petroleum Products Marketing said in its second quarter report.

Shell Oman Marketing Company’s revenue dropped 25.1 per cent to RO189.65mn during the first six months of 2020 due to a reduction in sales volumes. The company reported a net loss of RO104,000 for the first half of this year compared to a net profit of RO4.62mn in the same period of 2019.

With its increased refining capacity in the past few years, Oman had significantly raised its exports of refined petroleum products, but the coronavirus pandemic has hit the export sales hard this year.

The export sales of M91 grade petrol was 19 per cent lower during January – August period of 2020 at 2.7mn barrels, while export sales of M95 decreased 2 per cent to 667,200 barrels during the same period. Export of aviation fuel dropped 38 per cent to 4.12mn barrels in the first eight months of this year against 6.67mn barrels a year ago.

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