ISLAMABAD: Imports of the petroleum group dipped 8.80 per cent year-on-year in the July-December period of FY23 owing to the sharp reduction in demand as a result of the slowing down of the economy amid unprecedented inflation.

The highest-ever increase in prices also contributed to lower consumption of petroleum products. In absolute terms, the total import value of the petroleum group fell to $9.28bn in 1HFY23 from $10.18bn over the corresponding months of last year.

Data compiled by the Pakistan Bureau of Statistics (PBS) showed the imports of petroleum products declined by 16.90pc in value during 1HFY23 and 36.94pc in quantity. Import of crude oil decreased by 12.66pc in quantity while the value increased by 15.17pc.

Similarly, liquefied natural gas (LNG) imports fell by 18.72pc during July-December FY23 on a year-on-year basis. This would have translated into relatively lower LNG-based power generation — a replacement for furnace oil. On the other hand, liquefied petroleum gas (LPG) imports jumped 13.14pc.

In December 2022, total oil imports fell 12.02pc to $1.58 billion, from $1.80bn in the same month last year.

The PBS is yet to release December data, but figures from the first five months showed a decrease in the local production of almost all petroleum products dipping 13.63pc from a year ago. However, exports of petroleum products and crude oil rose 33pc and 66pc to 183,760 tonnes and 40,835 tonnes, respectively during the months under review.

Machinery imports dip

For many years machinery imports have been a major reason for the growing trade deficit, but it registered negative growth of 45.29pc to $3.23bn in 1HFY23 from $5.91bn in the corresponding period last year mainly due to a year-on-year decline of 66.73pc in the arrivals of telecom equipment including mobile phones.

The import of textile, office and power-generating machinery also shrank during the period.

Food is the second largest group of imports, but imports grew just 2.41pc to $4.91bn during the first half of FY23. The increase is mainly due to the massive buying of palm oil, which jumped 12.93pc in value and soybean oil 234.61pc in value during the period under review.

Pakistan imported 1.49 million tonnes of wheat, 728,855 tonnes of pulses and 4,023 tonnes of sugar during the July-December period of 2022-23.

Published in Dawn, January 20th, 2023