Pakistan’s petroleum product sales recorded a significant increase in July 2026, reflecting stronger economic activity, improved agricultural demand, and the impact of lower fuel prices. Industry data released on Monday showed that total petroleum sales reached 1.51 million tons, marking a 23% year-on-year (YoY) increase and the strongest July performance in several years.
According to a report by brokerage firm Arif Habib Limited (AHL), the growth was fueled by declining domestic fuel prices, improving conditions in the agriculture sector, and a gradual rebound in economic and automobile-related activity. The report noted that farmers’ purchasing power improved due to better agricultural economics, while lower fuel costs encouraged higher consumption across the country.
Excluding furnace oil (FO), sales by oil marketing companies (OMCs) increased 18.5% YoY, making July 2026 the strongest July for petroleum demand since July 2021.
Petrol and Diesel Consumption Climbs
Demand for motor spirit (MS), commonly known as petrol, remained robust during the month. Petrol sales rose 23% YoY to 0.73 million tons, reflecting increased transportation activity and higher vehicle usage.
Meanwhile, high-speed diesel (HSD) sales climbed 19% YoY to 0.62 million tons. Diesel consumption was supported by greater agricultural operations, commercial transportation, and industrial activity as the economy continued its gradual recovery.
Furnace Oil Registers Massive Growth
Furnace oil sales posted the strongest percentage increase among all petroleum products, surging 406% year-on-year to 0.08 million tons.
AHL attributed this sharp rise primarily to increased furnace oil consumption by the power sector, where seasonal electricity demand during the summer months led to greater fuel usage for power generation.
Strong Month-on-Month Growth
On a month-on-month (MoM) basis, overall petroleum sales also recorded impressive gains, rising 20% compared to June 2026.
Analysts said the monthly increase was largely driven by lower domestic petroleum prices, which followed a decline in international crude oil prices as geopolitical tensions eased in global markets.
During the month:
Petrol (MS) sales increased 12% over June.
High-speed diesel (HSD) sales rose 25%.
Furnace oil demand jumped 89%, supported by higher electricity generation requirements during peak summer temperatures.
PSO Strengthens Market Position
Among Pakistan’s oil marketing companies, Pakistan State Oil (PSO) emerged as the strongest performer in July.
The company’s total petroleum sales climbed 38% year-on-year to 702,000 tons. Petrol sales increased by 44.1%, while diesel sales rose 40.3%, enabling PSO to expand its presence in the domestic fuel market.
According to the report, PSO gained market share at the expense of Gas & Oil Pakistan (GO). GO’s market share in petrol declined to 5%, its lowest level since June 2024, while its diesel market share fell to 7%, the weakest since May 2024.
Government Levy Collections Remain on Track
The report also estimated that the federal government collected approximately Rs134 billion through the Petroleum Development Levy (PDL) during July.
Based on current trends, AHL believes the government remains on course to meet its FY2026-27 PDL collection target of Rs1.68 trillion, representing an increase of nearly 12% compared with the revised target for the previous fiscal year.
