ISLAMABAD: Oil import bill has surged 95.9 percent to $17.03 billion in the first 8 months of the current financial year on the back of higher prices in global market and depreciation of the rupee, Economic Survey 2021-22 revealed on Thursday.
The country imported $8.69 billion worth of oil in last year fiscal year.
During July-April period, crude oil imports rose by 75.34 percent in value and 1.4 percent in quantity during the period under review. Similarly, liquefied natural gas witnessed an increase of 82.90 percent in value, while liquefied petroleum gas (LPG) imports also jumped by 39.86 percent during the said period.
The scarce natural gas reserves of the country are quickly depleting on substantial increase in the demand for gas, putting huge pressure on the limited natural gas reserves of the country.
Higher oil prices in global market and massive depreciation of the rupee is making oil more expensive, triggering external sector pressure, and widening the trade deficit of the country.
The surge in oil import bill is attributed to increases in value as well as increase in demand as the import of petroleum products went up by 121.15 percent in value and 24.18 percent in quantity.
The government is looking for both short as well as long-term alternatives solutions to respond effectively to the substantial energy requirements. Keeping in view the rising demand for energy, the government is focusing on developing new exploratory wells to increase the supply of natural gas. In addition, LNG and piped gas are also being imported.
In FY2021, around 373 million mmbtu of LNG gas worth around $3.4 billion was imported. This corresponds to around 30 percent of total natural gas consumption in the country.
During July-Feb FY2022, 75.64 percent gas was domestically produced, while 24.36 percent of gas was imported. Coal is also used for electricity generation in the country. Thar has the largest coal reserves in Pakistan, which has been actively developed in recent years.
The first Thar plant, having capacity of 660 megawatts (MW), became operational in first quarter of FY2020. Currently, the overall electricity generation from coal has reached 5280 MW. Thar coal is contributing 1,320 MW, while imported coal contribution in electricity generation is 3,960 MW which is around 75 percent of the total electricity generation from coal in the country.
Electricity generation configuration is relying heavily on imported coal and this trend is likely to change as units based on the Thar field are added to the electricity generation mix.
Currently, hydro installed capacity is 10,251 MW, which is around 25 percent of total installed capacity. Pakistan has wind corridors as well and there is huge potential to generate electricity from wind. It is estimated that the country can generate 50,000 MW from wind.
The contribution of wind in the total installed capacity is 4.8 percent and currently stood at 1,985 MW. The potential for solar power in Pakistan is also high. The sunlight is available abundantly almost throughout the country.
Currently, capacity share of these renewable resources is small, but expected to increase sharply, as reflected in the Alternative and Renewable Energy Policy 2019. The installed capacity of solar is 600 MW, which is around 1.4 percent of the total installed capacity.
Pakistan is also producing energy from nuclear technology whose contribution is increasing gradually. The gross capacity of the nuclear power plants was 2,530 MW that supplied about 7,076 million units of electricity to the national grid during July-March FY2021.
The gross capacity of nuclear power plants has increased by 39 percent and it stood at 3,530 MW that supplied 12,885 million units of electricity to the national grid during July-March FY2022.
