The country's primary energy supplies depicted a growth of 3.8 percent to 62.9 million toe (tons oil equivalent) in fiscal year, 2008 as compared to 60.4 million toe in fiscal year, 2007. During the last four years, average growth stood at 5 percent which is significantly lower than 9.31 percent in fiscal year, 2005 and 8.06 percent in fiscal year, 2004.
The Hydro Carbon Development Institute has issued Pakistan Energy Year Book fiscal year, 2008, according to which share of imported energy has risen to 35 percent in fiscal year, 2008 versus 30 percent in fiscal year, 2004.
"This increase is mainly due to higher import of refined oil products on the back of higher oil demand from thermal power plants", Farhan Mahmood, an analyst at JS Global Capital said Thursday. Moreover, energy consumption grew by 4-year (fiscal year, 2004-08) commutative average growth rate (CAGR) of 8 percent, whereas energy supplies have risen by 5 percent with significant shift in energy supply mix from gas to oil over the last few years.
Gas, which is locally produced, remains the main stay of energy supplies. However, its share in overall supplies has declined to 47.5 percent from 48.4 percent last year and stood at 29.9 million toe. Oil supply during the period surged by 5.6 percent to 19.2 million toe thus increasing oil's share to 30.5 percent against 30 percent last year.
Out of total supplies which include gas, oil, LPG, coal, hydro-and nuclear electricity, indigenous production contributed 68.5 percent in fiscal year, 2008 as compared to 70.6 percent share in fiscal year, 2007 and 72.3 percent in fiscal year, 2004. Reliance on imported energy is due to higher demand for petroleum products, especially furnace oil for electricity generation. As a result, imports of petroleum products grew by a CAGR of 14 percent during last 4-years. After adjusting transmission, system losses and non-energy use, final energy consumption of the country stood at 39.4 million toe, up 9 percent on year-on-year basis. Share of gas and oil in energy consumption stood at 40.3 percent and 29.3 percent, while that of, electricity, coal and LPG stood at 15.2 percent, 13.7 percent and 1.5 percent, respectively.
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 last 4-years. 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 toe (54.9 percent share). On the other hand, oil contribution doubled in last 4-years to 44.7 percent. In FY04, gas share in thermal power generation was 77.5 percent, whereas oil had a share of 21.9 percent.
With oil and gas occupying 78 percent share in primary energy supplies, the rising energy consumption bodes well for the E&P firms. Local crude oil production meets only 18 percent of oil demand, while Pakistan is facing a gas supply shortage as well. Hence, the current situation favours E&Ps and providing an opportunity to enhance exploration activities and realise the upside potential in their asset portfolios. However, Rs 150 billion plus circular debt in the energy system is a major concern that could potentially hamper oil supplies, with reports suggesting that refineries are operating at 65-68 percent of their capacity.
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