Oil products imports fall 24pc in July-Dec as demand falters, crackdown bites

KARACHI: Pakistan's energy imports fell sharply in the first half of the current financial year, as a slowdown in economic activity and aggressive government action against fuel smuggling from dampened demand, industry data showed on Friday.

The imports of oil products plunged by 24 percent year-on-year in the six months to December, the data compiled by oil sector showed, with high-speed diesel (HSD) seeing the steepest decline at 36 percent.

December alone witnessed a staggering 77 percent drop in HSD imports compared to the same month a year ago, highlighting persisting weak demand and raising concerns about the sector's recovery.

"The import of HSD in December alone registered a bigger decline as demand remains subdued, and the situation isn't improving," an industry official said. Data showed HSD imports totaled 828,000 tonnes in the first half, down from 1.29 million tonnes in the same period last year.

Industry officials said that although a government crackdown against Iranian smuggled diesel helped to improve the sale of diesel from the formal channel, the Iranian diesel was still finding its way into the country and denting the sale of the formal sector.

The import of petrol, the second most consumed fuel in the country, also showed a 5 percent decrease to 2.5 million tonnes, compared to 2.6 million tonnes in the same period of the last financial year.

However, the sale of petrol recorded a 31 percent growth in December over the same month of the last year, which was attributed to a substantial decline in the price of petrol in November and December, which fell to 267 paise per litre from 331 paise per litre at the start of the financial year.

The import of crude oil, which is refined locally, showed a growth of 3 percent to 4.28 million metric tons, compared to 4.17 million tonness in the same period of the last year.

The import of liquefied natural gas (LNG) remained almost flat during the half under review. The import of jet fuel (JP-01) was on the higher side.

Pakistan is heavily dependent on the import of petroleum products to meet the local demand, as the domestic production hardly meets 30 percent of the demand and

the rest is fulfilled through imports.

In the first five months of the fiscal year 2023-24, the import bill for petroleum products was $5.72 billion, compared to $8.8 billion in the corresponding period of the last year.