Pakistan State Oil (PSO) is expected to report a Rs21.98 billion loss after tax for the fourth quarter of FY26, translating into an estimated loss per share of Rs46.81.
The projected loss represents a sharp reversal from the profit recorded in the same quarter last year, mainly because falling ex-refinery prices are expected to result in significant inventory losses.
Inventory Losses Erase Gross Profit
PSO is projected to record a gross loss of around Rs8.6 billion during the quarter, compared with a gross profit of Rs23.42 billion a year earlier.
The decline in international oil prices reduced the value of fuel stocks purchased at higher prices, creating substantial inventory losses for oil marketing companies.
Fuel Demand Remains Under Pressure
Fuel volumes across the industry are estimated to have fallen 17% year-on-year during the quarter.
Higher prices also affected demand, with motor spirit and high-speed diesel prices rising by approximately 47% and 50%, respectively. The increase in smuggled Iranian fuel further added pressure to formal fuel sales amid heightened regional tensions.
Despite weaker demand, PSO maintained its leading position with an estimated 43.2% market share.
RLNG Business Faces A Sharp Decline
PSO’s RLNG segment also remained under pressure.
The company handled only six RLNG cargoes during the quarter, compared with 21 in the previous quarter and 28 a year earlier.
Although the average DES price increased to around $11.17 per MMBtu, lower volumes limited the segment’s contribution. RLNG gross profit is estimated at approximately Rs1.06 billion, representing an 80% year-on-year decline.
Oil Marketing Sector Expected To Report Loss
The broader oil marketing companies sector is also expected to face a difficult quarter, with combined losses projected at around Rs20.4 billion, compared with a profit of Rs8.34 billion in the same period last year.
Finance costs, however, are expected to decline by approximately 27% as companies reduce short-term borrowing requirements.
For the full financial year, the OMC sector is still projected to record a modest 4% increase in profit after tax to Rs32.5 billion.
Dividend Despite Expected Loss
Despite the projected quarterly loss, PSO is expected to announce a Rs7.56 per-share dividend.
This could keep the company on the radar of income-focused investors, although the sustainability of shareholder payouts will remain dependent on PSO’s broader annual financial performance and cash position.
Fuel Supply Risks Remain
Near-term risks remain elevated for the oil marketing sector.
PSO’s motor spirit inventory cover has reportedly fallen to 18 days, below the mandatory 20-day requirement. A lower inventory buffer could leave the company and the wider sector more vulnerable to supply disruptions and sudden changes in international oil prices.
For PSO, the key challenges ahead will be managing inventory exposure, recovering fuel volumes and maintaining adequate stock levels while navigating volatile global oil prices.