Pakistan Energy Yearbook FY08: Dependence on imported energy products increasing

[Naveed Yaseen]

By Muhammad Yasir

KARACHI: The country’s dependence on imported energy products has risen by five percent in the last four fiscal years on its growing demand by power plants and transport sector.

The Pakistan Energy Year Book FY08, released by Hydro Carbon Development Institute, showed that the share of imported energy has risen to 35 percent in FY08 against 30 percent in FY04. This is mainly due to higher import of refined petroleum products, crude oil and Liquefied Petroleum Gas (LPG) for meeting the local demands of various sectors. During last four fiscal years (FY04-08), the energy consumption grew by 8 percent according to Compound Annual Growth Rate (CAGR), whereas energy supplies have risen by 5 percent with significant shift in energy supply mix from gas to oil.

According to the report, the energy consumption of the country stood at 39.4 million tonnes with gas and oil’s share in energy consumption at 40.3 percent and 29.3 percent, while that of, electricity, coal and LPG at 15.2 percent, 13.7 percent and 1.5 percent respectively.

The oil contribution doubled during the last 4 years with consumption reaching 44.7 percent. In FY04, gas share in thermal power generation was 77.5 percent , whereas oil had a share of 21.9 percent. Owing to rising gas shortage and availability of alternative fuel like furnace oil (FO), gas supply to power plants declined annually by 3 percent during the said period. Besides these factors, phenomenal increase in CNG consumption (43 percent CAGR) during this period also confined gas supplies to power sector. In terms of fuel mix, gas remains the primary contributor to thermal power generation with consumption of 8.5 million tonnes (54.9 percent share).

The report said the country’s primary energy supplies posted 23.8 percent growth in FY08 and stood at 62.9 millon tonnes (tons of oil equivalents) versus 50.8 million tonnes in FY04. In FY04-FY08, the average growth of supplies stood at 5 percent with 3.8 percent growth posted in FY07, 9.31 percent growth in FY05 and 8.06 percent in FY04.

The indigenous gas remains the major contributor of the energy supplies in this period. However, its share in overall supplies has declined to 47.5 percent from 48.4 percent last year and stood at 29.9 million tonnes. Whereas, oil supply during the period surged by 5.6 percent to 19.2 million tonnes thus increasing oil’s share to 30.5 percent against 30 percent in FY04. Out of total supplies which include gas, oil, LPG, coal, hydro-and nuclear electricity, indigenous production contributed 68.5 percent in FY08 as compared to 70.6 percent share in FY07 and 72.3 percent in FY04. Therefore imports of petroleum products grew by a CAGR of 14 percent during last 4 years on the rising local demand.

Energy experts told the country’s reliance of imported energy will increase with the same pace on the constant surging demand of natural gas and furnace oil particularly for electricity generation. Also, the reliance of transport is shifting back to petrol and diesel on the shortage of natural gas in north part of the country during winter. The cash-starved refineries are operating under capacity, so the country has to be dependent on imported petroleum products in the future, they added.

The total refinery output fell by 6.1 percent in year-on-year terms during July-January as their production capacity shrank significantly with low stocks of crude oil due to piling up of circular debt. The sales of Furnace Oil and High Speed Diesel decreased by 9.5 percent and 4.8 percent YoY in 7MFY09. The Motor Spirit off take has improved by 4.4 percent YoY. On the other hand, the local production of energy products is growing with a stable rate, keeping its share constant at 18 percent in the local consumption. Oil and LPG production of the country fell by 5.9 percent and 9.3 percent YoY respectively to 68,184 bpd and 1,403 tpd, respectively. Gas production, on the other hand, increased by 1.2 percent YoY to 4,023mmcfd.

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