Sharp fall in motor, jet fuel production in H1 2020

Refineries operated by OQ, the Sultanate’s integrated refining and petrochemicals conglomerate, reported a steep decline in the output of motor fuels, aviation fuel and other refined products during the first half of this year – the result of pandemic lockdown measures coupled with a protracted economic slump that have dramatically impacted fuel consumption trends.

According to figures released by the National Centre for Statistics and Information (NCSI), production of M-91 – the more popular of Oman’s two main motor fuel grades – plummeted 32 per cent to 5.090 million barrels during the first six months of this year, down from 7.528 million barrels for the same period of 2019.  Production of premium M-95, however, was lower by only 12 per cent at 5.793 million barrels this year, down from 6.580 million barrels last year.

But reflecting a sharp rebound in economic activities following the easing of lockdown measures towards the latter part of Q2, gasoline output jumped 47.6 per cent in June versus figures for May, NCSI noted in its latest statistical report.

Similarly, aviation fuel production slumped a hefty 40 per cent to 4.455 million barrels during the January – June 2020 period, down from 7.443 million barrels last year, as the country’s airports remained shuttered for all but a limited number of passenger and cargo flights for much of the second quarter.

LPG (cooking gas) production also fell 25 per cent to 2.827 million barrels in the first half of this year, down from 3.790 million barrels during the corresponding period of 2019.

But bucking the production downtrend was diesel. Output of diesel – the dominant fuel source for heavy vehicles, construction machinery and diesel-powered gensets in remote parts of the country – soared 16 per cent to 16.711 million barrels this year, up from 13.524 million barrels last year.

Reflecting the slump in fuel production and consumption, the country’s leading fuel marketing companies reported a sizable decline in their revenues for the six months ended June 30, 2020.

Shell Oman Marketing Company, the largest of the Sultanate’s trio of fuel marketing firms, posted a 25.1 per cent decline in revenue for the Jan – June 2020 period, citing a reduction in sales across all business segments during the pandemic. Earnings slumped to RO 189.650 million this year, down from RO 253.323 million during the same period of 2019.

Al Maha Petroleum Products Marketing reported a 27 per cent drop in total revenues in initial unaudited results for the six months ended June 30, 2020.  Revenues decreased to RO 171.615 million this year, down from RO 233.895 million for the corresponding period of 2019.