KARACHI: In November 2023, Pakistan experienced a significant 13% decline in its overall energy imports, which reached $1.42 billion. This decline sheds light on subdued demand for petroleum, oil, and gas products, reflecting the country’s economic challenges. These challenges include sluggish growth and a recent surge in product prices, which have hampered purchasing power across various sectors.
Economic activities remained lacklustre, prompting refineries to explore export opportunities for furnace oil, a key product used in power production. By doing so, they created room to import larger quantities of crude oil, enabling the production of premium products such as petrol and diesel.
According to the latest data from the Pakistan Bureau of Statistics (PBS), refined product imports plummeted by 29% to 499 million in November, while crude oil imports increased by $566 million. Additionally, the import of Re-gasified Liquefied Natural Gas (RLNG) experienced a 9% decrease, amounting to $290 million, largely due to elevated international prices and the country’s dwindling foreign exchange reserves.
Industries, including major players like the textile sector, displayed reluctance in purchasing expensive imported gas due to rising costs, which made it economically unviable for sustaining factory operations and overall economic activities.
The lacklustre performance in large-scale manufacturing (LSM) industries, coupled with a 33-month low in electricity production in November, underscores the continued sluggishness in economic activities. Despite achieving a GDP growth of 2.1% in the first quarter (Jul-Sep) of FY24, analysts caution that this growth is influenced by specific factors such as improved agricultural output, particularly in cotton and rice, and the low-base effect from the previous year’s economic contraction.
