Pak energy usage down by 18pc causing oil import bill cut by $5.8b in 2022-23

Industrial sector experienced the most substantial decline, with 27.3pc decrease, while transport sector saw notable 21.1pc drop

ISLAMABAD  -  Pakistan’s energy consumption has de­clined by 18 per cent, resulted in re­duction in oil import bill by $5.8 billion, during the Fiscal Year 2022-23.

However, Pakistan’s total installed electricity capacity reached 45,605 MW, recording a hike of 10.15 per cent or 4203 MW, during the FY 2022-23, from the previous year’s 41,402 MW, said Pa­kistan Energy Yearbook 2022-23.

In 2022-23, a notable decrease was observed in the overall import of pe­troleum products, which fell by a sub­stantial 37.63 per cent compared to the previous year, said the report.

Moreover, the import of crude oil by refineries also registered a significant decrease of 29.4 per cent. This reduc­tion in imports had a positive effect on the oil import bill, which decreased from $19.4 billion to $13.6 billion.

There was a significant reduction of 18 per cent year-over-year in final en­ergy consumption, in 2022-23, impact­ing various sectors of the economy, said the report.

The industrial sector experienced the most substantial decline, with a 27.3 per cent decrease, while the trans­port sector saw a notable 21.1 per cent drop. Additionally, the other govern­ment sector reduced energy consump­tion by 19.5 per cent, agriculture by 7.1%, commercial by 4.1%, and the do­mestic sector by 1.3 per cent.

Compared to the previous year, the average daily production of local crude oil saw a decline of 5.34 per cent, fall­ing from 73,436 barrels per day to 69,513 barrels per day, it added.

The report noted that the production of natural gas decreased by 3.86 per cent, dropping from 3,390 MMCFD to 3,259 MMCFD. This reduction in both oil and gas production can be attributed to limited upstream activities within the country, marked by the drilling of only 15 exploratory and 32 development/appraisal wells during this period.

The overall oil consumption in 2022-23 witnessed a significant drop of 26.5 per cent, declining from 22.84 million tonnes to 16.79 million tonnes. Among various petroleum products, diesel ex­perienced the most substantial reduc­tion, with a decline of 47.6 per cent, fol­lowed by furnace oil, which fell by 45.9 per cent. High Octane Blending Compo­nent (HOBC) and Motor Spirit also saw significant decreases of 42.7 per cent and 16.9 per cent, respectively. Kero­sene consumption decreased by 14.9 per cent.

Pakistan imported 8.05 million met­ric tons of liquefied natural gas (LNG) in FY 2022-23 to meet the growing de­mand for gas. This import indicates the strategic response to address the na­tion’s energy requirements. Despite the import of LNG, there was an over­all decrease of 8.71 per cent in natural gas consumption, with consumption falling from 1,342,434 million cubic feet (MMCft) to 1,225,442 MMCft. No­tably, some sectors experienced var­ying trends in gas consumption. The Cement Sector observed a notable in­crease of 7.9 per cent, signalling growth and potential expansion in this indus­try. The Pak Steel sector also showed growth with a 6.8 per cent increase in gas consumption, aligning with possi­ble economic activities in the steel sec­tor. The Transport Sector witnessed a 6.3 per cent increase, indicative of in­creased fuel usage for transportation needs, possibly corresponding to eco­nomic activities. Conversely, the Indus­trial Sector saw a significant decline of 16.9 per cent in gas consumption. The commercial, power and fertilizer sec­tors also experienced reductions of 12.1 per cent, 9.6 per cent and 27.8 per cent, respectively, compared to the pre­vious year. In 2022-23, the domestic coal production in Pakistan saw a re­markable surge, reaching 15.01 million tonnes. This represented a significant increase of 56.5 per cent compared to the previous year and a remarkable 28.4 per cent increase over the last six years.

This upswing in domestic coal pro­duction underscores a notable shift in the country’s energy sector dynamics. Conversely, coal imports experienced a substantial decline of 50.8 per cent during the same period. The reduction in coal imports had a direct impact on the overall consumption of coal, which recorded a notable decrease of 13.7 per cent in contrast to the prior year. It’s worth noting that a significant por­tion of the imported coal, around 53 per cent, was utilized by the power sector, which saw a remarkable surge of 20.9 per cent in coal consumption. The remaining 47 per cent of imported coal was used by the cement and other sectors. In contrast, the consumption of Aviation fuel showed an increase of 15.3 per cent compared to the previ­ous year.

During the fiscal year, Pakistan’s total installed electricity capacity reached 45,605 MW, marking a noteworthy in­crease from the previous year’s 41,402 MW. This growth was primarily driv­en by the addition of three new coal-fired power plants to the national grid, with a combined capacity of 1,980 MW. Additionally, there was an increase of 1,945 MW in hydropower capacity dur­ing this period mainly due to inclusion of 5 hydel power plants in the electric­ity dataset. In the realm of electrici­ty generation, the year 2022-23 wit­nessed a notable decrease, with total generation falling from 150,866 GWh to 139,380 GWh when compared to the preceding year, 2021-22. Renewa­ble sources, including solar, wind, and bagasse, contributed 5,840 GWh to the total, underlining the growing role of clean energy in the country’s energy mix. Nuclear generation also saw a sig­nificant increase, surging from 19,174 GWh to 25,959 GWh, representing a re­markable growth of 35.4 per cent. Sim­ilarly, hydel generation also saw a sig­nificant increase, surging from 32,706 GWh to 36,643 GWh, representing a remarkable growth of 12.04 per cent. Conversely, electricity generation from fossil fuels decreased by 23.6 per cent, totalling 70,938 GWh. The import of electricity increased from 463 GWh to 479 GWh, reflecting a 3.4 per cent growth. The annual growth rate of electricity consumption demonstrated a steady growth of 2.73 per cent.

During this period, Pakistan experi­enced a transformation in its primary commercial energy supply dynamics, with a decrease from 94 to 83 MTOE compared to the previous year. This shift can be attributed to the contrast­ing performances of different energy sources. Notably, the supplies of nucle­ar and hydel electricity recorded a sig­nificant year-on-year increase of 35.39 per cent and 12.04 per cent respec­tively, emphasizing the growing sig­nificance of clean and green energy in Pakistan’s power generation. Addition­ally, Liquefied Petroleum Gas (LPG) saw an increase of 2.59 per cent, con­tributing to the diversification of ener­gy sources. Conversely, several other energy sources experienced a decrease in supply. Overall, the primary com­mercial energy supply mix in 2022-23 witnessed a substantial decrease of 12.1 per cent, primarily driven by a re­duction in imports.

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