Pakistan is likely to import over 500,000 tonnes of petrol and around 250,000 tonnes of diesel to meet the local consumption demand next month.
The demand of furnace oil for the coming month is expected to reach 161,000 tonnes, the approximations calculated by the domestic industry revealed.
It is pertinent to note that Pakistan relies almost 80 percent on imported oil as the local production is not enough to meet the surging demand. Domestic prices are around their highest in the country’s history due to a swell in global oil prices, which puts more burden on the local consumers as rupee has massively devalued against dollar.
The country would be importing diesel and petrol for local consumption as local supply from the refineries would not be enough to meet demand. However, no import of furnace oil would be made as local refineries were overflowing with this fuel owing to almost zero demand from independent power producers, the major consumers of furnace oil.
Estimates of the local oil industry put the demand for petrol at 712,500 tonnes in February 2022 and that of diesel at 647,500 tonnes.
The demand for oil products is on the rise in the country as oil sales in the calendar year 2021 jumped 19.5 percent to 21 million tonnes from 17.41 million tonnes in 2020. Petrol sales hit the highest ever in 2021 with 8.64 million tonnes, up 13.4 percent from 7.62 million tonnes in 2020. During first half of fiscal year 2021-22, consumption of petroleum products also increased as overall sales of these products rose 14 percent to 11 million tonnes, despite seven percent drop in December 2021 sales.
During the first half of this fiscal year, the import, in terms of value, of refined petroleum products surged to over $5 billion compared to $2.168 billion in the same period last year, registering a massive increase of 133 percent. High spending on petroleum imports has contributed significantly to a widening trade gap, which further increased current account deficit to over $9 billion in the first half of the current fiscal.
Petrol sales climbed 10 percent to 4.5 million tonnes in IHFY22, followed by 17 percent and 16 percent rise in the offtake of furnace oil and high speed diesel to 1.9 million tonnes and 4.3 million tonnes respectively.
In December 2021, furnace oil and high speed diesel sales dropped 53 percent and 2 percent to 112,000 tonnes and 612,000 tonnes from 240,000 tonnes and 622,000 tonnes in December 2020. Petrol sales inched up 4 percent to 700,000 tonnes in December 2021 from 673,000 tonnes in December 2020.