Imported fuel, food items drill $20bn hole in state kitty

ISLAMABAD: Amid the dwindling foreign exchange reserves, Pakistan’s dependence on imported fuel for production of electricity and food items for consumption have increased manifold, as these two heads are consuming $20 billion on an annual basis.

The cash-bleeding power sector has touched such a level where it cannot run on basis of status quo anymore.

The country experienced a blackout on Monday for the whole day. The energy mix is the basic perpetual problem of cash bleeding power sector with increasing reliance on import-based fuel, which requires hard-earned dollars.

These whopping figures for foreign exchange clearly showed that the dependence on imported fuel increased through the adoption of flawed and wrong policies. The same happened in the case of neglected agriculture sector as despite being an agriculture-based economy, the county is utilising precious foreign exchange earnings of almost $10 billion on an annual basis.

Official data available with The News disclosed that the alarming situation of import-dependent sectors was heading towards complete breakdown at a time when the country was facing a severe dollar liquidity crunch.

Official data for the calendar year 2021 showed that Pakistan spent approximately $9.5 billion through the import of LNG, furnace oil and coal for production of dollar-based expensive electricity.

“The government imported LNG to the tune of $4.012 billion, furnace oil of $3.159 billion and coal of $2.316 billion in calendar year 2021,” official data showed.

The official data shows that the government imported POL products to the tune of $9.2 billion in the first six months (July-Dec) of the current fiscal year against $10.181 billion in the same period of the last financial year. Within the Petroleum Group, the government imported POL products of $4.2 billion in the first six months of the current fiscal year as against $5.056 billion in the same period of the last financial year, registering a decrease by 17 percent.

The government imported liquefied natural gas to the tune of $1.9 billion in the first half of the current fiscal year as against $2.4 billion in the same period of the last financial year.

On import of food group, the government imported food products of $4.9 billion in the first six months (July-Dec) period of the current fiscal year against $4.7 billion in the same period of the last financial year.

The government so far imported $1.4 million tons of wheat having a value of $609.434 million in the first six months of the current fiscal year against import of 1.3 million tons having value of $470.454 million in the same period of the last financial year.

The government imported palm oil of $2.082 billion in the first half of the current fiscal year against $1.8 billion in the same period of the last financial year. The import of sugar decreased significantly as it utilised just $0.334 million in first six months of the current fiscal year against $189.242 million in the same period of the last financial year.

The government imported pulses of $533.386 million in the first six months of the current fiscal year as against $346.064 million in the same period of the last financial year.

The government imported tea of $318.799 million against $300 million in the same period of the last financial year.

It shows that the country’s import bill on food group might go up to $10 billion for whole financial year till end June 2023.