Petroleum exports almost double after witnessing astronomical rise

Pakistan’s oil import bill has witnessed meagre growth over the first eight months of Fiscal Year (FY) 2024-25. Data from the Pakistan Bureau of Statistics reveals that over the aforementioned period, a 1.2 percent growth was posted by the oil import bill.

As per credible reports, the oil import bill for the first eight months of FY 2024-25 now rests at $10.71 billion – Up from the previous value of $10.58 billion over the same period last year.

Historically, Pakistan has been a net importer of petroleum products, with few exports recorded in the commodity. However, Pakistan has exported a vast array of petroleum products during the current FY because of higher crude oil imports into the country.

Higher imports of the commodity have allowed domestic refineries to scale up and manufacture a higher volume of petroleum-based products. Exports of petroleum products have surged by a staggering 96 percent during the first eight months of the current fiscal year from a conservative $183.33 million to $358.15 million.

Analysts believe that this surge in exports could assist the economy’s growth as an improvement could be witnessed in Pakistan’s trade balance. For Pakistan, which has historically run large trade deficits, especially with its oil-rich trading partners, this export growth could imply a potential narrowing of the trade deficit in the coming years.

Compared to the first eight months of the last fiscal year, during which Pakistan recorded no exports of crude petroleum, exports of the commodity have reportedly spiked to a whopping 40,552 tons. Exports of petroleum top naphtha have surged by an astronomical 113.77 percent on a year-on-year basis to settle at their current volume of 44,571 tons.

Some believe that rising export levels of petroleum products imply that the domestic demand for such products has not kept up with production. According to data from PBS, the output for all 11 petroleum products grew by 2.47 percent compared to last year's production levels.

Data shows that domestic production of high-speed diesel (HSD) grew by 6.21 percent. HSD is a major input in Pakistan’s agricultural and transport sectors, and given the agrarian nature of the economy, increasing HSD production implies that the country could move towards self-reliance.

Furnace oil production posted a growth of 19.74 percent at the start of the second half of FY 2024-25. If domestic refineries continue to operate as they currently are, exports of petroleum products could continue to witness the steady growth they have enjoyed over the past few months.