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Oil import bill surges to $6.5bn in five months

Updated December 18, 2018

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The data for July-November suggest that the trade deficit has already started a declining trend. — File
The data for July-November suggest that the trade deficit has already started a declining trend. — File

ISLAMABAD: The country’s oil import bill surged by 18 per cent year-on-year to $6.54 billion during the first five months of this fiscal year, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday.

Contrary to this, barring agriculture products and textile group, imports from almost all of the groups including machinery-related items posted negative growth during the period under review.

The data for July-November suggest that the trade deficit, which has risen to alarming levels, has already started a declining trend.

Consequently, the import bill during the five months fell by 2.77pc year-on-year to $4.6bn. As a result, the trade deficit fell by 2.03pc year-on-year to $14.5bn during the same period.

Product-wise data show that the petroleum group imports saw a double digit growth of 17.6pc, reaching $6.54bn in July-November as against $5.55bn over the corresponding months last year, with the largest surge coming from crude oil, up 41.3pc.

The cost of petroleum products imports dipped 10.4pc during the five months, whereas a 36.6pc decline was recorded in terms of the total quantity imported; bringing the total down to 4.7m tonnes.

The import bill for liquefied natural gas (LNG) soared by 107.8pc, while that of liquefied petroleum gas plunged 33pc.

The data shows a changing trend in the 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-November FY18, machinery imports fell by 17.9pc to $3.73bn, from $4.5bn last year. This was led by shrinking imports of textile and power-generating machinery at 19.57pc and 52.6pc, respectively.

However, mobile phones imports grew by 0.4pc while those of construction machinery declined 29pc.

Transport group, another important contributor to trade deficit, also receded during July-November as it posted a 21.7pc decline. The month saw a dip in imports of almost all transport items.

Food imports — the second-largest component contributing to the total import tally — shrank 9.3pc during the period under review.

Exports inch up by 1.29pc

The overall export proceeds posted a paltry growth of 1.29pc year-on-year to $9.2bn during the five months. On monthly basis, the export proceeds fell by 6.3pc year-on-year to $1.84bn in November.

The product-wise details show that exports of ready-made garments went up by 0.28pc, knitwear up 10.6pc, bed wear 1.96pc, whereas towel exports declined 2.24pc, while that of cotton cloth declined by 0.85pc in value.

The textile group exports posted a decline of 0.07pc year-on-year to $5.5bn during July-November, according to the PBS data.

The decline comes despite government’s support in the form of cash subsidies, special export packages and multiple rupee depreciation during the last year.

Among primary commodities, cotton yarn exports decline by 14.72pc, yarn other than cotton increased by 0.52pc whereas made-up articles – excluding towels – increased by 1.68pc, tents, canvas and tarpaulin dipped by 8.8pc with proceeds from raw cotton dipping by 72.6pc during the period under review.

Published in Dawn, December 18th, 2018

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