KARACHI: Pakistan’s oil import bill during the first month of 2012-13 increased by 13.81 percent to $1.35 billion against $1.18 billion in the corresponding month last year, according to the data released by the Pakistan Bureau of Statistics (PBS).
Analysts said that severe energy crisis in the country and lower capacity operations of refineries pushed the oil import bill upwards.
The country spent huge foreign exchange reserves on the purchase of finished products that amounted to $988 million for July, which was $795.22 million in the same month last year, showing a rise of 24.24 percent.
Experts said that the rise in imports of finished products was due to high demand for energy generation.
The crude oil import, however, fell by 7.35 percent to $363.27 million during the month under review against $392 million in July 2011.
Industry experts said that the low quantity of crude imports reflected that the country’s refineries are not running with full capacity due to the circular debt issue. Some experts believed that the latest rise in the import bill despite international price decline would be an effort to build the country’s oil reserves.
The import of finished petroleum products in terms of quantity went up by 16 percent as in terms of value the rise stood at 6.86 percent higher as compared to the previous month. The oil import bill constitutes around 37 percent of total import bill worth $3.66 billion during July. It surged by 41.35 percent to $10.286 billion in the last fiscal year against $7.277 billion in 2010-11.
High oil payments pushed the trade deficit to a record level of $21.271 billion during FY12 from $15.6 billion in the preceding year.
Analysts said that the country should ensure energy supply through own resources, otherwise the oil import bill would affect the country’s fiscal position.
“As gas supply situation in the country is not expected to improve in the near future, the oil import bill will continue to mount pressure both on value and volumetric basis,” an analyst said.