KARACHI, Sept 10: A big rise in oil prices in the international markets has increased Pakistan's petroleum import bill for July-August 2004 by more than 35 per cent, making it the largest component of the country's overall import bill.

Data released by the Federal Bureau of Statistics show that Pakistan had to pay around $639.2 million on imports of about 2.516 million tons of petroleum crude and petroleum products during July-August 2004. In the same period last year, the country had spent $472 million on import of about 2.267 million tons of petroleum crude and its by-products.

So, whereas the oil import bill rose by more than 35 per cent, the increase in imported quantity was only 11 per cent. This indicates that record-high oil prices in July-August in the international market have started taking their toll on Pakistan's import bill.

World oil prices started moving up from $30 a barrel at end-June and flew past a 14-year high at $49.4 in August but then began to recede. Thus, the average increase in oil prices for July-August deliveries was very high.

Experts say oil prices shot up in the international market more because of speculations fuelled by fears of disruption in supplies from Iraq and Russia than due to real demand boosters like increased import by China and India.

Forward price of New York's reference Light Sweet Crude for October delivery also started from as high as $46 a barrel, but then began to show volatility after recording a slight fall. It stood at around $42.7 a barrel on Thursday.

Officials in oil refineries and oil marketing companies say that increased oil price in the international market coupled with Pakistan's growing need for petroleum crude and petroleum products may push up its oil import bill to $4 billion during the current fiscal year.

In the last fiscal year, oil import bill was at $3.16 billion, one fifth of the country's total imports of $15.473 billion. Pakistan's need for oil imports is growing despite a rise in domestic production of gas as its economy is accelerating. In the last fiscal year, the country's economy grew by an estimated 6.4 per cent and the growth target set for this year is 6.6 per cent.

Trade statistics show that the oil import bill of $639.2 million in July-August 2004 was the largest component of its total import bill of $2.846 billion. Machinery imports worth $578.7 million claimed the second largest share. In July-August 2003, machinery imports stood at $468 million.

The third largest share in the total import was that of agricultural and other chemicals, including fertilizers. The country spent $537 million on imports in July-August this year, up from $438.6 million in July-August last year.

A huge increase of about 24 per cent in imports of machinery and more than 22 per cent in imports of agricultural and other chemicals again reflect improved activity in industrial and agricultural sectors.

Pakistan is placing increased emphasis on industrial and agricultural sectors to achieve an overall high growth in its GDP, and banks are making generous loans to borrowers in both sectors. The data also show that in July-August this year, Pakistan's food import bill rose by 28 per cent to $183 million from $143 million in a year-ago period.