Oil import bill rises 97% in first quarter

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ISLAMABAD: The country’s oil import bill widened by more than 97% to $ 4.59 billion in the first quarter of the current fiscal year (3MFY22) from $ 2.32 billion in corresponding months of last year due to rising prices in the international market and the depreciation of the rupee.

The continued increase in the import oil bill causes a trade deficit and can cause external unrest for the government. The unprecedented increase in the prices of petroleum products for domestic users was observed in the first quarter of the current fiscal year.

Data released by the Pakistan Bureau of Statistics showed that imports of petroleum products increased by 93.21 pc in value and 10.86 pc in quantity.

Imports of crude petroleum increased by 81.15 pc in value and fell by 2.35 pc in quantity during the months under review, while those of liquefied natural gas increased by 144.02 pc in value. Liquefied petroleum gas imports jumped 53.95% in value in July-September FY22.

The figures for food imports climb by 66.11 pc; the country is expected to import 0.6 million tonnes of sugar, 4 million tonnes of wheat

The second largest part of the import bill relates to food products. The food import bill widened by more than 38.03 percent to $ 2.36 billion in the first three months of the current fiscal year, from $ 1.71 billion in the corresponding months of last year to close the food production gap.

Another source of concern for the government is the persistent food import bill and the resulting trade deficit. Pakistan spent more than $ 8 billion on imports of edible items in the last fiscal year.

The food import bill will increase further in the coming months as the government has decided to import 0.6 million tonnes of sugar and 4 million tonnes of wheat to build up strategic reserves.

The total import bill rose 66.11% to $ 18.74 billion in July-September FY22 from $ 11.28 billion in the corresponding months last year.

The import bill for all food products has shown growth in value and quantity in the first three months of this year, indicating a shortage of domestic production. Within the imported food group, the main contribution came from wheat, sugar, edible oil, spices, tea and legumes. Edible oil imports have seen a substantial increase in terms of quantity, value and value.

Palm oil imports increased 53.91% in value between July and September for fiscal year 22, to reach $ 891.15 million, from $ 579.08 million in the corresponding months of the last year. In quantity, a negative growth of 14.80% was recorded in palm oil imports during the same period. The bill for palm oil imports has increased due to rising international prices.

As a result, the prices of vegetable ghee and cooking oil have increased in recent months for domestic users. The import of soybean oil fell by 54.61 pc in value and 74.42 pc in quantity during the 3MFY22 financial year compared to a year ago.

The country imported 338,036 tons of wheat during the first three months of the current financial year against 431,593 tons imported last year, a decrease of 21.68 pc. In the first nine months of last year, the government imported 3.612 million tonnes of wheat worth $ 983.326 million compared to no imports the year before.

From April of this year to July, no wheat was imported. The cabinet’s economic coordination committee decided to import four million tonnes of wheat to maintain the buffer stock.

The import of sugar amounted to 157,827 tons in July-September FY22 against 30,134 tons last year, an increase of 423 pc. Despite imports, the price of sugar is steadily increasing with the commodity reaching as high as Rs115 in the retail market.

Imports of tea and spices increased by 6.46 pc and 40.09 pc, respectively, in July-September FY22. The growth is mainly due to lower imports of these products through transit trade and smuggling controls in border areas.

The import bill for pulses, dried fruits, milk and other food products saw massive growth in July.

The machinery import bill rose 35.15% to $ 2.84 billion in July-September FY22 from $ 2.10 billion in the same month last year. Imports of power generation machinery increased 24.94% in the months under review, mainly due to projects related to the China-Pakistan economic corridor.

Posted in Dawn, le 17 October 2021

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