ISLAMABAD: Country’s import of oil and gas fell sharply by 28 percent during fiscal year 2019/2020 owing to significant decline in international prices.
The import of petroleum group has decline to $10.42 billion during fiscal year 2019/2020 as compared with $14.44 billion in the preceding fiscal year, according to data released by Pakistan Bureau of Statistics (PBS).
Industry sources explained that the slump had been observed in terms of value due to significant decline in international oil prices.
During the year the international oil prices were remained lower due to conflict between Russia and Saudi Arabia.
The Russia–Saudi Arabia oil price war of 2020 is an economic war triggered in March 2020 by Saudi Arabia in response to Russia’s refusal to reduce oil production in order to keep prices for oil at moderate level. This economic conflict resulted in a sheer drop of oil price over the spring of 2020.
Reportedly, on March 08, 2020, Saudi Arabia initiated a price war with Russia, facilitating a 65 percent quarterly fall in the price of oil.
Unofficial reports suggested that in the first few weeks of March, US oil prices fell by 34 percent, crude oil fell by 26 percent, and Brent oil fell by 24 percent.
The price war was triggered by a break-up in dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over proposed oil-production cuts in the midst of the COVID-19 pandemic. Russia walked out of the agreement, leading to the fall of the OPEC+ alliance.
Oil prices had already fallen 30 percent since the start of the year due to a drop in demand. The price war is one of the major causes and effects of the currently ongoing global stock-market crash.
Pakistan’s import of retail petroleum products fell by 24.54 percent to $4.74 billion during fiscal year 2019/2020 as compared with $6.28 billion in the preceding fiscal year.
The imported quantity of the retail petroleum products, however, increased by 3.7 percent during the year under review. The quantity increased to 10.8 million metric tons during fiscal year 2019/2020 as compared with 10.42 million metric tons in the preceding year.
The import of petroleum crude even fell more sharply by 40.44 percent to $2.72 billion during fiscal year 2019/2020 as compared with $4.57 billion in the preceding fiscal year.
The import of Liquefied Natural Gas (LNG) has declined by 20.21 percent to $2.66 billion during fiscal year 2019/2020 as compared with $3.33 billion in the preceding fiscal year.
However, import of Liquefied Petroleum Gas (LPG) registered 17.63 percent growth to $294 million during fiscal year 2019/2020 as compared with $250 million in the preceding fiscal year.