Crude oil imports up 81 percent RECORDER REPORT KARACHI (October 13) : Pakistan's crude oil imports jumped 81 percent for the first quarter as the country's largest oil refinery started its operation. The quantity rose to 1.8 million tonne for the current fiscal as compared to 0.98 million tonne in the corresponding period of 1999-2000.

In term of value, the crude oil imports bill reached US$ 38 million, reflecting an increase of 157 percent over the first quarter of 1999-00. The difference becomes larger in term of rupee, due to its depreciation against dollars. In rupee terms, the bill is 170 percent higher for the period under review. Since July, the rupee has weakened by more than 13 percent against the US currency dollar. The bill reached Rs. 20 billion for the July-September 2000 period, official statistics show.

The soaring crude oil import bill is said to be the result of Parco mid-country oil refinery's commencement of operations. The refinery formally started its operation in September. It had started purchasing crude consignments in July. The refinery has the capacity of processing 4.5 million tonnes a year. Analyst are of the view that in the coming months, the increase in crude oil import bill might be neutralised when Parco's products make their way into the local market, and bring down the need to import petroleum products.

The overall oil import bill has reached closer to a billion dollars for the first quarter of the current financial year. Though the bill has been almost twice that of the first quarter of last year, analysts believe that growth in oil cost might come down in coming months. International benchmark prices of petroleum products ranged between $19-21 a barrel during July-September 1999-00 and started going up in September 1999.

"With the last year's oil imports touching the highest level of 27 percent of country's total import, the situation this year is feared to be even worse" Muhammad Sohail, head of research at Invest Cap said. "We forecast that in line with high global price, import bill can touch a level of $3.4 billion, or 32 percent of the total estimated import bill for the current fiscal, thereby deteriorating Pakistan's fragile balance of payment situation," Sohail said.

The country may not enjoy a letup during this year on account of energy imports. Nevertheless, the government's plan to increase its dependency on gas as a substitute for oil would provide relief to its foreign exchange reserves. There will be a visible betterment in the oil import bill after Parco comes in with its full operation, and Ghazi Brotha Hydel Power project of 1200 mw comes on line by 2002.

http://www.brecorder.com/story/S0000/S0000/S0000103.htm

-- Martin Thompson (mthom1927@aol.com), October 13, 2000