By Muhammad Mudassar
ISLAMABAD, March 23 (INP-WealthPK): Despite growing prices of oil in the international market amid tense geopolitical situation, the sales of petroleum, oil and lubricants (POL) rose by 13% to 13,295,400 million tonnes (MT) during the first seven months (July-January) of the ongoing fiscal year 2021-22 compared to the 11,761,770 MT sales during the same period of FY2020-21, according to Oil Companies Advisory Council (OCAC).
One of the major reasons for higher POL products sales is the sharp increase in automobiles sales during the period. According to Pakistan Automotive Manufacturers Association (PAMA), car sales rose by 63.5% during the first eight months of FY2021-22 compared to the same period of FY2020-21.
| Sectors |
Total Sales (Jul-Jan 2021-22) (MT) |
Total Sales (Jul-Jan 2020-21) (MT) |
Percentage Change (%) |
| Internal Use |
|
|
|
| Domestic |
20,040 |
18,122 |
10.6 |
| Total industry |
805,974 |
899,572 |
-10.4 |
| Agriculture |
8,489 |
7,364 |
15.3 |
| Transport |
|
|
|
| Total transport |
10,131,986 |
9,026,769 |
12.2 |
| Total power |
1,993,447 |
1,538,437 |
29.6 |
| Total government: |
208,519 |
165,226 |
26.2 |
| a. Total internal volume |
13,168,455 |
11,655,490 |
13.0 |
| Overseas/foreign |
|
|
|
| Aviation |
120,671 |
83,310 |
44.9 |
| Bunkers |
4,075 |
7,988 |
-49.0 |
| Export |
2,199 |
14,982 |
-85.3 |
| b. Total overseas volume |
126,945 |
106,280 |
19.4 |
| Grand total (a+b) volume |
13,295,400 |
11,761,770 |
13.0 |
Domestic use of oil also increased by 10.6% during the period under review.
However, the use of POL products in the industry (cement, others) dropped by 10.4% during the first seven months of the ongoing fiscal year.
The use of oil by the agriculture sector increased by 15.3% during July-January compared to the same period of last fiscal year.
During this period, the transportation sector consumed the bulk of POL products with a 76.7% share. The sale of POL products to transport sector rose by 12% during the comparable period.
The power sector was the second-largest consumer of POL products with 14% of the total consumption during the comparable period. Sale of POL products to the power sector rose by 29.6% during the July-January period of the ongoing fiscal year compared to the same period of last fiscal year.
Pakistan also exports a small number of POL products. However, the exports of petroleum products significantly dropped (85%) to 2,199 MT during the first seven months of the current fiscal from 14,982 MT during the same period last year.
Though consumption of oil is associated with an increase in economic activity, Pakistan has always been heavily dependent on foreign fuel oils as the country imports almost 80% of such products to meet its domestic demand, which keeps inflating the import bill.
Analysts believe that it is imperative that the government promote the use of electric vehicles as much as possible to help reduce its heavy reliance on fuel oils. They call for speedy implementation of the electric vehicle policy, which was announced in 2020. They suggest that though big investments are needed for setting up assembly plants of electric vehicles, Pakistan has to adopt this technology sooner than later to ease financial burdens.
They stress that Pakistan should also make a fast transition away from fossil fuels to renewable energy to honour its commitment that renewables should constitute 30% of energy consumption by 2030.
