By Jawad Ahmed ISLAMABAD, Mar 01 (INP-WealthPK): Transportation plays an important role in accelerating economic activity in a country. In Pakistan, practically the entire transportation is either gasoline or diesel-fired. Currency depreciation and financial constraints are exacerbated by the country’s heavy reliance on the petroleum imports.   With a rapid growth in population as well as urbanization, the transportation sector is expanding at an unprecedented rate. With the increase of urbanization, growing middle class in cities, faster motorization and private vehicle ownership are increasing the country’s dependency on the petroleum imports. According to the Pakistan Bureau of Statistics (PBS), petroleum group imports increased by more than 113%, reaching $10.18 billion in July-December 2021, up from $4.77 billion in the same period of the previous fiscal year. According to the annual report of the Oil & Gas Regulatory Authority (OGRA), transport (48.8%) and power (42.7%) sectors accounted for about 91% of the total oil consumption in Pakistan in FY14, and the two sectors continue to account for nearly 90% of the total oil consumption in FY19-20. While the transportation sector's consumption of petroleum products climbed to 81% during FY19-20. Source: OGRA – State of the Regulated Petroleum Industry 2019-20   The use of petroleum in power and industry has declined considerably since the start of the pandemic, according to statistics, but the transportation sector still remains the largest user of petroleum products. According to the Global Energy Assessment report, the global transportation industry accounts for 28% of overall energy consumption, with oil-based fuels accounting for 95% of transport energy. Despite the fact that oil-based energy has a detrimental impact on importing countries' balance of payments (BOP) as well as the environment, the world is heavily reliant on the use of oil-based petroleum products for transportation. Looking back in time, Pakistan adopted CNG (Compressed Natural Gas) as an alternative fuel in the early 1990s to meet the rising demand for transportation. Despite being more efficient and environmentally sustainable for the transportation sector, the use of CNG in transportation has been progressively dropping over the years due to limited indigenous gas supplies and rising demand in other industries. Natural gas consumption in the transportation sector fell from 178 Million Cubic Feet Per Day (MMCFD) in FY 2018-19 to 127 MMCFD in FY 2019-20. Source: Integrated Energy Planning for Sustainable Development (IEP) According to the Integrated Energy Planning for Sustainable Development (IEP), the demand for energy in Pakistan's transportation industry would reach around 25 million tonnes of oil (TOE) between 2021 and 2030. With the introduction of electric vehicles, a paradigm change is possible, and in the future, electricity consumption is predicted to gradually replace the petroleum product usage. Petroleum accounts for almost 20% of the total imports, thus any reduction in this category would help the country to address its serious issue of balance of payment. The transportation dependency on petroleum will grow even more in future as a result of regional integration and cross-border connectivity through the China Pakistan Economic Corridor (CPEC). In order to lessen its dependency on imported fuels, Pakistan must also encourage the use of alternative energy sources such as natural gas, biofuels, and adoption of electric vehicles. More feasible initiatives, such as Metro-Bus services in the densely populated areas of cities, are needed to reduce the demand for private vehicles. Furthermore, reduction in subsidies on fuel can curb the driving culture in the country. Given Pakistan's dependency on oil imports and consumption in transportation sector, proactive measures to increase exports can help offset high petroleum product payments.