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Fuel import bill surges 30pc

Updated September 21, 2018

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Imported earth-moving machinery is being loaded on a truck at the Karachi port. After surging in the last three years, the machinery imports have now started reversing the trend with second consecutive drop in the first two months of this fiscal year.—File photo
Imported earth-moving machinery is being loaded on a truck at the Karachi port. After surging in the last three years, the machinery imports have now started reversing the trend with second consecutive drop in the first two months of this fiscal year.—File photo

ISLAMABAD: The country’s oil import bill rose by 30.08 per cent year-on-year to $2.64 billion in the first two months of FY19 whereas machinery imports registered a 19.2pc decline to $1.6bn, showed data released by Pakistan Bureau of Statistics.

Barring petroleum and agriculture products, almost all of the groups in the imports table posted negative growth.

Consequently, total import bill during July-August FY19 crawled up 1.01pc to $9.82bn, from $9.73bn over the corresponding period last year.

The data for July-August suggest that the trade deficit, which has risen to alarming levels, might have already hit its peak since subsequent months have shown tepid growth. The newly elected government’s fortunes on external sector could see a marked improvement if the ongoing declining trend continues during this fiscal year.

Machinery arrivals decline 19.2pc

Product-wise data show that the petroleum group imports saw a robust growth of 30.08pc, reaching $2.64bn in July-August as against $2.03bn over the corresponding months last year, with the largest surge coming from crude oil, up 66.85pc. In terms of quantity, however, crude imports fell 1.8pc to 1.66 million tonnes, from 1.69m tonnes in same period last year.

The cost of petroleum products imports dipped 10.08pc during the first two months of current fiscal year, whereas a 32.24pc decline was recorded in terms of the total quantity imported; bringing it down to 1.95m tonnes.

The import bill for liquefied natural gas (LNG) soared by 146.77pc during the months under review while that of liquefied petroleum gas plunged 30.15pc.

The data show a changing trend in the overall imports, with machinery-related imports registering a marginal decline, and oil imports — including LNG — bill increasing in large part due to the rise in global oil prices.

For a number of years now, machinery imports have been a cause of major reason for the government since they have continuously fuelled trade deficit but since the past few months, the category has seen a decline in imports. For July-August FY18, machinery imports fell by 19.22pc to $1.59bn, from $1.97bn last year. This was led by shrinking imports of textile and power-generating machinery at 18.43pc and 52.24pc, respectively. Telecom equipment imports went down 6.49pc — excluding mobile phones which grew by 6.06pc while those of construction machinery fell 4.56pc.

On the other hand, imports of office and electrical machinery posted substantial increases of 20.17pc and 8.5pc, respectively.

Transport group, another important contributor to trade deficit, also receded during July-August FY19 as it posted a 26.16pc decline. The month saw a dip in imports of all types of transport equipments including auto parts and road motor vehicles.

Food imports — the second-largest group contributing to the total import tally — import shrank 15.5pc in July-August from a year ago.

This was led by 94.1pc decline in imports of dry fruits and nuts, 82.77pc in soybean oil, 12.19pc palm oil and 15.17pc milk products.

Furthermore, imports of ‘other’ food items were down 11.53pc during the period under review.

Published in Dawn, September 21st, 2018