KARACHI: Despite massive price hikes, petrol has emerged as one of the most consumed fuel in Pakistan as its demand hit an all-time high of 8.35 million tonnes in FY21 as compared to an unstable pattern of usage witnessed in other fuels in the last five years.

According to province-wise consumption of energy products from FY17 to FY21, prepared by Oil Companies Advisory Council (OCAC), total petrol consumption in FY17 was 6.6 million tonnes which soared to 7.4m tonnes in FY18, 7.6m tonnes in FY19, 7.45m tonnes in FY20 and the highest-ever 8.35m tonnes in FY21. There was a slight decline in FY20 due to a slowdown in the movement of people amid Covid-19 restrictions followed by a countrywide shutdown in April 2020.

Petrol demand continued to get a boost amid the long closure of compressed natural gas (CNG) outlets in the last few years, especially in winters, due to gas shortage. As a result, the CNG vehicles have been switched to petrol despite its rising prices.

The massive increase in sales of two- and three-wheelers in the last few years had also boosted the demand for petrol while an ineffective transport system forced people to buy motorcycles. Another reason for switching over to petrol had been the declining saving ratio in CNG owing to its rising prices.

CNG closure, high bike sales and ineffective transport system are key factors

Punjab consumed 5.3m tonnes of petrol in FY21 which was 4.4m tonnes in FY17. Sindh held the second spot with the usage of 1.8m tonnes from 1.4m tonnes in FY17. Demand for petrol in Khyber Pakhtunkhwa and Balochistan also soared to 827,894 tonnes and 221,054 tonnes in FY21, respectively, from 511,833 tonnes and 193,825 tonnes in FY17.

In high-speed diesel (HSD), the peak consumption of 9m tonnes was recorded in FY18 as compared to 8.5m tonnes in FY17 and after ups and downs in FY19 and FY20, the fiscal year 2020-21 ended with 7.8m tonnes of diesel. Punjab held the lion’s share of 4.8m tonnes in FY21, a fall of 12pc over 5.45m tonnes in FY17. Diesel demand in Sindh stood at 1.76m tonnes in 2020-21 as compared to 1.8m tonnes in FY17.

In KP and Balochistan, the consumption of diesel stood at 905,908 tonnes and 109,722 tonnes in FY21 as compared to 803,201 tonnes and 157,855 tonnes in FY17. Its demand in Azad Kashmir rose to 125,026 tonnes in FY21 from 122,567 tonnes in FY17.

Refineries being shut down

Furnace oil (FO) consumption improved to 3.23m tonnes in FY21 if compared with 2.368m tonnes in FY20 but these numbers are far lower than 9.6m tonnes in FY17, 7.4m tonnes in FY18 and 3.5m tonnes in FY19.

Dr Ilyas Fazil, former chief executive OCAC and ex-member (Oil) Ogra, said due to no/less consumption of the high sulphur fuel oil (HSFO) by the power sector, the local refineries have been operating at 60 per cent or less of their capacity. “A refinery cannot safely operate below 60pc. As a result, three out of five refineries are shut down. The loss is being compounded by the fact that furnace oil stocks are causing a serious headache,” he added.

He said with higher consumption, the import of petrol has shot through the roof.

Mr Ilyas said solution is simple. Maximise local use of HSFO from the local refineries, allowing them to operate at full capacity and put an embargo on the import of furnace oil till stocks level dictate so. This would free up natural gas use from power production, allowing more availability of gas for domestic and export industries, he added.

The Covid-19 shutdowns had played havoc with the financial health of many international and domestic airlines. The usage of JP-1, commercial airline fuel, had witnessed a peak of 928,499 tonnes in FY18 as compared to 833,104 tonnes in FY17. However, in FY21, the countrywide JP-1 consumption plunged to an all-time low of 363,514 tonnes from 791,748 tonnes in FY19 and 550,835 tonnes in FY20, indicating an alarming slowdown in air traffic.

The consumption of JP-1 fuel in Sindh fell to 302,343 tonnes in FY21 against 656,030 tonnes in FY17, while in Punjab its demand plunged to 58,477 tonnes from 67,548 tonnes in FY17.

With zero kerosene consumption in Balochistan and FATA as per OCAC’s data, the country’s total usage stood at 70,211 tonnes in FY21. The highest kerosene of 120,958 tonnes was recorded in FY17 which continued dropping to 114,386 tonnes in FY18, 102,830 tonnes in FY19 and 88,939 tonnes in FY20.

During 5MFY22, total oil sales (petrol, diesel and furnace oil) rose by 17.6pc to 9.60m tonnes from 8.16m tonnes in the same period last fiscal year. Petrol, diesel and FO sales rose by 10.8pc, 19.8pc and 28.5pc to 3.81m tonnes, 3.74m tonnes and 1.78m tonnes in 5MFY22 from 3.44m tonnes, 3.12m tonnes and 1.38m tonnes in the same period last fiscal year.

Published in Dawn, December 31st, 2021