KARACH: Pakistan’s import of petroleum products will fall with domestic value-addition due to the country’s enhancing refining capacity, the Economic Survey for fiscal 2022-23 indicated on Thursday.
The survey stated that the total demand for petroleum products remained at 23.1 million tonnes during FY2022. However, this year witnessed a decline in demand to 13.1 million tonnes during July-March FY2023 from 16.7 tonnes in July-March FY2022. It attributed the declining trend to a decrease in demand for furnace oil, high-speed diesel, motor spirit, and High Octane Blended Component (HOBC), which comprises more than 95 percent of the total demand. Furthermore, the transport and power sectors are major petroleum consumers, covering around 90 percent of total demand. On the other hand, the only increase has been in jet fuels (JP-1 and JP-8) demand, which grew 18 percent this year. As such, the demand for petroleum products decreased in all sectors ranging from 5.3 percent to 45.4 percent, except the overseas demand.
Survey indicated that the decrease in MS and HSD demand could be attributed to the high prices and the decline in FO demand due to shifting power generation from FO/HSD to RLNG/coal and other alternative sources. Overall, the total demand for petroleum products decreased by 21.9 percent during July-March FY2023 compared to FY2022, the survey stated. The document showed that Pakistan is an importer of petroleum products and crude oil. Imports of petroleum products during July-March FY2023 were around 6.1 million tonnes, valued at more than $ 5.7 billion. Major imported products were MS, HSD, and FO, with import quantities of 3,853.9 thousand tonnes, 1,645.6 thousand tonnes, and 530.6 thousand tonnes, respectively. As such, this year witnessed a significant decrease in imports of all five petroleum products.
Furthermore, due to efforts of the government, the country’s reliance on FO for power generation declined that lead to 530.6 thousand tonnes of imports during July-March FY2023 against 1,318.2 thousand tonnes for the comparative period of FY2022, whereas the total imports of FO were 2,258.2 thousand tonnes in FY2022.
Furthermore, it is expected that with a better fuel mix for electricity generation, the import of FO will further diminish. Also, with the addition of refining capacity in the country, in consequence of more value-addition domestically, the import of petroleum products would decline further, the survey said.
Crude oil import requirement of refineries during July-March FY2023 remained at 5,858.4 thousand tonnes, which was 6,802.3 thousand tonnes during the same period of FY2022. Furthermore, the total import requirement for crude oil was 9,284.6 thousand tonnes for FY2022, the survey stated.