Pakistan’s energy import bill hit a record high at $2.22 billion in April 2022, as the growth in demand was emerging partly from “speculative fuel buying” ahead of the likely decision by the government to increase petroleum prices. The import bill rose 94% in April compared to $1.14 billion for the same month of last year, a research house reported on Monday, citing the Pakistan Bureau of Statistics (PBS).
“The havoc that has been created by the anticipated price hike is translating into speculative fuel buying,” said Oil Companies Advisory Council (OCAC), the representative body of Pakistan’s downstream oil industry, in a statement. “There was highest-ever oil import bill for April 2022 amid 72% year-on-year jump in Arab Light crude prices along with 28% year-on-year volumetric growth,” Arif Habib Limited (AHL) Head of Research Tahir Abbas said in a commentary on the energy import bill.
Pakistan imports Arab Light crude from the Middle Eastern countries. Pakistan energy import bill has continued to surge due to a persistent rise in the international crude prices and the growth in demand in the domestic market, as petroleum product prices have remained unchanged in the country since February. On the contrary, the crude oil price has hovered around $110 per barrel compared to around $90 per barrel when the previous government fixed the price in late February for the next four months.
The ousted Pakistan Tehreek-e-Insaf (PTI) government took the decision to leave petroleum prices unchanged in an attempt to protect the people from a new wave of inflation. A section of experts have urged the new Pakistan Muslim League-Nawaz (PML-N) led coalition government to pass the increase in international oil prices on to domestic consumers. The strategy will force the consumers to slash their energy use and will help the government to cut the energy import bill, they say.
However, the coalition government has decided to leave the petroleum prices unchanged to stave off the political backlash. Cumulatively, in the first 10 months of FY22, the energy import bill surged 96% to $17.03 billion compared to $8.70 billion in the same period of last year. Imports of refined products surged 121% to $8.55 billion in the 10-month period of current fiscal year. Crude oil imports rose 75% to $4.22 billion, liquefied natural gas (LNG) imports increased 83% to $3.70 billion and liquefied petroleum gas (LPG) imports rose 40% to $557 million.
Oil sales
Among petroleum products, sales of high-speed diesel (HSD) came in at 363,667 tons in the first half of May 2022, while demand for petrol stood at 363,210 tons, the OCAC said. Expressing concern, OCAC Chairman Waqar Irshad Siddiqui said, “The downstream oil sector … has continued to fulfill its national obligation of serving the country amidst a global energy shortage, impact on availability and prices of oil due to the Russia-Ukraine conflict, sharp depreciation of (local) currency pushing petroleum product prices to new highs, and limited credit facilities worsening the liquidity crunch for oil marketing companies and refineries.”
The cumulative sales figures for April 2022 and the first fortnight of May 2022 represented a surge in demand “due to the ongoing harvesting season (of wheat)”, it said. Sales of diesel surged 17% to 919,442 tons in April 2022 compared to the same month of last year, it said.
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