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ISLAMABAD: Pakistan Economic Survey 2020-21 revealed that the country witnessed a decline in indigenous natural gas and crude oil production by 4.70 percent and 6.72 percent respectively during the first three quarters (July-March) 2021.

The survey released on Thursday reveals that production of crude oil declined to 20,768 USB in the first nine months of current financial year from 22,263 USB recorded during the same period in 2019-20. The production of natural gas also reduced to 962,397 mmcfd in first nine months of the current financial year from 1,009,893 mmcfd in the same period last year.

The shift in power generation away from furnace oil also reduced the fuel's demand and affected coke & petroleum industry output.

Coke and petroleum industry registered a double-digit contraction of -17.46 percent during first nine months (Jul-Mar 2021) as compared to -6.0 percent decline during the same period last year. Petroleum industry has been adversely affected from both demand and supply side.

While demand remained subdued due to higher end-consumer prices and reduction in commercial activities diesel and furnace oil production decreased by -18.8 percent and -17.5 percent respectively.

The government also claims that the government reduced the rate of petroleum levy (PL), a key measure to contain inflation. During the press conference, Federal Finance Minister Shaukat Tareen stated that the government increased the price of crude oil by 32 percent while its international price rose 119 percent. "We did not raise the prices of petroleum products 86 percent during the current financial year", he added.

Crude oil's local extraction and imports reached 68.9 million barrels in July-March 2021 from 58.6 million barrels in corresponding period last year, while share of import in first three quarters of 2021 was 48.2 million barrels as compared to 38.8 million barrels in the same period last year.

In July-March 2021, consumption of petroleum products increased to 14.7 million tons from 12.5 million tons in the same period last year. Oil storage of 38,579 metric tons was added in the country's logistics during the period of July-March, 2021 at the cost of Rs 5.7 billion. Four licenses for construction and one license for operation of Lube Oil Blending, Reclamation and Grease Plants were issued. Five licenses for setting up Lubricant Marketing Company (LMC) and three Operational licenses for LMCs were also issued. These provisions of licenses will enhance the domestic supply of crude oil and will decrease import bill.

During the period, 304,573 additional gas connections including 303,243 domestic, 1,020 commercial and 310 industrial connections were provided across the country. The gas will be supplied to approximately 524,000 new consumers (this target is subject to approval/revision by OGRA) during the fiscal year 2021-22. Gas utility companies have planned to invest Rs. 17,571 million on transmission projects, Rs. 91,812 million on distribution projects and Rs. 3,156 million on other projects bringing the total investment of Rs 112,539 million during the fiscal year 2021-22.

Natural Gas contributes about 35 percent to the primary energy supply mix of the country. Pakistan has an extensive gas network of over 13,315 KM transmission 149,715 KM distribution and 39,612 KM services gas pipelines to cater to more than 10.3 million consumers across the country. At present, the capacity of two floating Regasification Storage Units (FRSU) for Re-gasified Liquefied Natural Gas (RLNG) is 1200 MMCFD and accordingly RLNG is being imported to mitigate gas demand-supply shortfall.

The average natural gas consumption was about 3,723 million cubic feet per day (MMCFD) including 950 MMCFD volume of RLNG during July-February 2021. During July-February 2021, the two gas utility companies (SNGPL & SSGCL) have laid 143 Km Gas Transmission network, 2,616 Km distribution and 886 Km services lines and connected 70 villages/towns to the gas network.

Copyright Business Recorder, 2021