The oil consumption in the country in July rises for the first for the last over 14 months because of the increase in furnace oil usage by the electricity producers after the decline in hyrdo power generation.
According to figures received from the oil market industry, the total petroleum consumption increased by 23 percent to 1.39 million tonnes in July 2004 as compared with 1.13 million tonnes in the same period last year due mainly to the double-digit growth in high-speed diesel and furnace oil consumption. The demand for gasoline increased by 21.3 percent to 115,000 tonnes in July 2004 in the corresponding period last year due to increased automobile sales whereas diesel consumption surged 19.76 percent to 435,000 tonnes in July 2004 over July 2003 because of higher fuel utilisation in the agriculture sector.
The demand for furnace oil also showed a recovery that increased by 18.3 percent as the hydel (hyrdo) power generation dropped significantly due to water shortage in rivers.
The Pakistan State Oil (PSO) since the beginning of the new fiscal year has invited tender for nearly 500,000 tonnes of furnace oil to meet the rising demand of power producers. The import of furnace oil to increase the country's total petroleum products during this fiscal year.
Moreover, the ever-increasing oil prices at the international market would also increase the import bill in the period. The country's petroleum import bill for July-August 2004 rose 35 percent after a substantial increase in prices in the international markets.
The data released by the Federal Bureau of Statistics show that Pakistan had to pay around $ 639.2 million on imports of about 2.516 million tonnes of petroleum crude and petroleum products during July-August 2004. In the same period last year, the country had spent $472 million on import of about 2.267 million tonnes of petroleum crude and its by-products.
The world oil prices started moving up from $ 30 a barrel at June-end, and flew past a 14-year high at $ 49.4 in August, but then began to recede. Thus, the average increase in oil prices for July-August deliveries was very high.
Experts said oil prices shot up in the international market more because of speculations fuelled by fears of disruption in supplies from Iraq and Russia than due to real demand boosters like increased import by China and India.