Islamabad, July 20, 2023 – Pakistan’s import bill for petroleum products witnessed a significant decline of 37 percent during the fiscal year 2022-23, as per official statistics released by the Pakistan Bureau of Statistics (PBS).
The country spent $7.63 billion on importing petroleum products in FY23, compared to $12.07 billion in the preceding fiscal year. The petroleum products are mainly finished goods imported to meet the domestic demand as Pakistan relies on imports to meet its petroleum needs.
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The substantial drop in the import bill can be attributed to a sharp decline in sales of petroleum products during the same period. Sales of petroleum products in Pakistan reached a 17-year low in FY23, according to recent data released on Tuesday. The decline in sales can be attributed to higher product prices and an overall economic slowdown, which have significantly impacted consumer demand.
According to analysts at Topline Securities, the sales of petroleum products dropped by 27 percent year-on-year (YoY) to 16.6 million tons during FY23. This marks the lowest sales figure for oil marketing companies (OMCs) since FY06, excluding the COVID-19-affected year of FY20 when sales were at their lowest. In FY06, OMCs recorded sales of 14.6 million tons, as reported by the Pakistan Energy Yearbook.
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Among the petroleum products, furnace oil (FO) and High-Speed Diesel (HSD) experienced the most significant declines, with a YoY drop of 49 percent and 28 percent, respectively. Additionally, Motor Spirit (MS) sales declined by 17 percent YoY in FY23.
The total import of the petroleum group, including crude oil, also saw a decline of 27 percent, amounting to $17 billion during the fiscal year 2022-23, compared to $23.32 billion in the preceding fiscal year. Specifically, the import of petroleum crude declined by 11.64 percent to around $5 billion during the fiscal year under review, compared to $5.6 billion in the preceding fiscal year.
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The drop in the import bill for petroleum products could offer some relief to the country’s balance of payments and external finances. However, it also reflects the challenges posed by an economic slowdown and higher product prices, which have contributed to reduced consumer demand and overall consumption in the petroleum sector.
