Power Sector Guts Oil Use: 75% Reduction in Five Months
In the power sector, K-Electric (KE) consumed 57,000 tonnes of petroleum products, compared to 387,000 tonnes same period least year, whereas Pakistan Electric Power Company (PEPCO) consumed 6,500 tonnes, compared to 82,000 tonnes a year back.
Karobar
KARACHI: According to figures released by the oil industry on Friday, the power sector reduced its consumption of petroleum products by about 75% in the first five months of the current fiscal year as the nation experienced an economic downturn and shifted to less expensive alternatives.
The power industry led the list as fuel oil usage fell significantly, despite a fall in petroleum product consumption across other sectors.
The data indicated that from July to November, the power sector—which consumed the most petroleum the year before—used just 300,000 tonnes of fuel oil and diesel, as opposed to 1.15 million tonnes during the same time in 2023.
The industry consumed 435,000 tonnes of oil during the period under review, compared to 480,000 tonnes in the same period of last year. The cement sector consumed 414,000 tonnes of petroleum products in the first five months, against the consumption of 459,000 tonnes in the corresponding period of last year.
The transport sector also consumed less in the months under review, compared to the same period of last year, as the total consumption in the sector stood at 5.5 million tonnes, compared to 5.9 million tonnes a year ago.
The drop in the consumption by the transport sector was mainly caused by road transport, which switched to smuggled Iranian diesel, which was supplied in large quantities in the first quarter of this fiscal, before the government launched a crackdown against the smuggling of diesel and petrol from Iran. The consumption by railways and aviation witnessed improvement during the period under review. The consumption by the government sector also recorded a decline during the period, as it dropped to 118,000 tonnes in the first five months, against 146,000 tonnes in the same period of the previous financial year.
Hubco’s consumption remained zero, compared to 50,000 tonnes a year ago, and KAPCO also did not consume a single litre, compared to 130,000 tonnes in the first five months of the last fiscal. The consumption by Narowal Energy halved to 15,000 tonnes, compared to 33,000 tonnes in the first five months of the last fiscal.
Industry people attributed the decline to the economic slowdown, as well as the low consumption of fuel oil by power plants, which led the consumption figure to drop massively.
They stated that although diesel consumption did marginally improve following the crackdown on smuggling, the economic climate did not improve enough to drive up consumption. They claimed that smuggled petroleum products also hurt sales in the official industry.
The forecast for the petroleum sector, according to industry officials, is not promising because a big improvement in the economy is not anticipated anytime soon. According to them, consumption of petroleum goods will stay low unless the economy expands and people's spending power increases. The demand for petroleum products is closely correlated with these factors.
