Pakistan’s Fuel Import Cost Jumped by 96% Between Jul-Oct 2021

The recent fluctuations in prices of petroleum products on a global scale have resulted in a massive surge in oil import cost in Pakistan, which reportedly climbed 96 percent in the last four months. The import bill for petroleum products escalated to $6.197 billion between July and October 2021 from $3.168 billion during the same period in 2020. Analysts reasoned that the surge in the import bill is a result of an increase in global prices of oil and Re-liquified Natural Gas (RLNG). Additionally, the increase in demand for petroleum products on a domestic scale has also caused an increase in the import bill. Tahir Abbasi, Head of Research at Arif Habib Limited, told the media that prices of oil in the international market are likely to decrease in the near future, but there are no signs of a huge drop for now. Khurram Shehzad of Alpha Beta Core predicted the same, stating that there will be no sharp decline in prices of petroleum products in the two upcoming quarters. The recent shortfall of RLNG has also contributed to the rise in fuel import bills. According to a media report, local production of natural gas can only cater to seventy percent of the demand, which is why Pakistan has been relying heavily on imported RLNG to meet its energy needs. Market speculations also suggest that the situation is likely to stay the same for six months before any significant developments take place in the oil sector.