ISLAMABAD: Over the past three years, the stock of circular debt in gas sector has nearly doubled to Rs 650 billion from Rs 350 billion in 2018. The inappropriate response of the government created problems in the import of LNG by the private sector which led to gas crisis in the country, especially in winter.
Pakistan Economic Survey 2021-22 released on Thursday reveals Pakistan’s dependence on liquefied natural gas (LNG) has increased in recent years due to depleting indigenous natural gas deposits.
Local production of crude oil and natural gas increased by 4.48 percent and 3.45 percent, respectively in first nine months (July-March 2022) of current financial year 2021-22 as compared with the first three quarters of last financial year 2020-21; however, indigenous supply of gas witnessed a decline of around 5 percent and limited percentage of local production resulted in import of crude oil and other oil products in large quantities.
Production of natural gas stood at 28.2 million cubic meters and crude oil at 21.70 million barrels in the first nine months of current financial year against 27.25 million cubic meter gas and 20.77 million barrels in same period last year.
The indigenous supply of natural gas still witnessed a decline of around 5 percent and its contribution recorded 33.1 percent in the total primary energy supply mix of the country. The number of consumers; however, has increased from 10.3 million to more than 10.7 million across the country.
The average natural gas consumption has declined from 3,723 mmcfd to about 3,565 mmcfd during July-March financial year 2022. This also includes 863 mmcfd volume of RLNG during July-March 2022.
The consumption of natural gas in power sector has reduced from 610 mmcfd to 560 mmcfd. The use of gas in domestic sector has also decreased to 907 mmcfd during July-March financial year 2022 from 915 mmcfd in the same period last year.
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Commercial sector witnessed a decline in the use of gas and its consumption registered at 62 mmcfd during July-March financial year 2021-22. Earlier it was 65 mmcfd during the first nine months of financial year 2021- 22.
The use of gas (CNG) in the transport sector declined to 49 mmcfd from 63 mmcfd. The consumption of gas in fertilizer sector reduced from 687 mmcfd to 684 mmcfd while the consumption in general industry increased to 439 mmcfd from 433 mmcfd. However, total consumption of gas has reduced to 2,702 mmcfd during July-March financial year 2022 from 2,773 mmcfd during the same period in financial year 2021.
The liquefied natural gas (LNG) witnessed an increase of 82.90 percent in value, while liquefied petroleum gas (LPG) imports also jumped by 39.86 percent during July-April financial year 2022.
Government is focused on developing new exploratory wells to increase the supply of national gas. In addition to that, LNG and piped gas are being imported. In the financial year 2021, around 373 million mmbtu of LNG gas worth around $3.4 billion was imported.
This corresponds to around 30 percent of the total natural gas consumption in the country. During July-Feb financial year 2022, 75.64 percent gas is domestically produced, while 24.36 percent of gas is being imported.
The import bill of oil also increased by 95.9 per cent to $17.03 billion during July-April financial year 2022 compared to $8.69 billion during the same period last year. Higher oil prices in the global market and massive depreciation of the Pakistani rupee is making oil more expensive.
The surge in oil import bill is attributed to increases in value, as well as, increase in demand as the import of petroleum products went up by 121.15 percent in value and 24.18 percent in quantity. The crude oil imports rose by 75.34 percent in value and 1.4 per cent in quantity during the period under review.
Supply side disruptions, which were originated from pandemic, were still in place due to emergence of new variants. Ukraine-Russia conflict has further escalated this disruption. The commodity prices, internationally, are increasing significantly along with intense uncertainty in the market confidence, the survey says.
Copyright Business Recorder, 2022
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