By Azam Tariq

Pakistan's petroleum imports increased to 13.8 million metric tonnes during July-March FY2025-26, while the import bill rose to $8.9 billion, reflecting stronger domestic fuel demand amid economic recovery and growing transportation needs, according to the Pakistan Economic Survey 2025-26 released by the Ministry of Finance.

The survey shows that petroleum imports increased by 10.5% compared with 12.5 million tonnes imported during the corresponding period of the previous fiscal year. Meanwhile, the import bill grew by 6.3% from $8.4 billion recorded a year earlier.

According to the survey, rising petroleum imports were driven by increasing consumption across transportation, industrial and commercial sectors as economic activity gained momentum during FY2025-26.

Pakistan's economy expanded by 3.7% during the fiscal year, supported by growth in agriculture, industry and services. The recovery in economic activity increased demand for fuel used in transportation, manufacturing, construction and power generation.

The survey highlights that petroleum products remain central to Pakistan's energy mix despite ongoing efforts to expand the use of indigenous and renewable energy resources.

Domestic consumption of petroleum products reached 13.17 million tonnes during July-March FY2025-26, registering a growth of 7% compared with the same period of the previous fiscal year.

The transportation sector remained the largest consumer of petroleum products in the country. According to the survey, transport accounted for 82.5% of total petroleum consumption during the period under review.

Growing mobility, increased commercial activity and higher freight movement contributed to rising fuel demand across the transportation sector.

The survey notes that diesel and motor gasoline remained the dominant petroleum products consumed in the country due to their extensive use in road transport, agriculture and industrial operations.

The increase in petroleum imports reflects Pakistan's continued dependence on imported energy supplies to meet domestic demand.

Despite efforts to diversify energy sources, imported petroleum products continue to play a critical role in supporting economic activity and maintaining energy security.

According to the Ministry of Finance, fluctuations in international oil prices continue to influence Pakistan's import bill and external sector performance.

The survey notes that petroleum imports are among the largest components of the country's import expenditure and significantly affect the trade balance.

Pakistan's merchandise trade deficit widened to $27.9 billion during July-March FY2025-26 compared with $22.7 billion during the same period of the previous fiscal year. Higher petroleum imports were among the major contributors to the increase in the trade gap.

The report notes that global energy market volatility, geopolitical developments and changing oil prices continue to pose risks for energy-importing countries, including Pakistan.

To reduce vulnerability to external shocks, the government continues to pursue policies to increase domestic energy production and expand renewable energy generation.

The survey highlights progress in this regard, noting that clean energy sources accounted for 53.1% of electricity generation during FY2025-26. Hydropower, nuclear, solar and wind energy are increasingly contributing to the national energy mix.

However, petroleum products remain indispensable for transportation and several industrial activities, making import dependence likely to continue in the near term.

The Ministry of Finance emphasizes the importance of improving energy efficiency, promoting alternative energy sources and encouraging sustainable transportation solutions to manage future fuel demand.

According to the survey, strengthening domestic refining capacity and expanding indigenous energy resources could also help reduce the country's long-term import dependence.

With petroleum imports reaching 13.8 million tonnes and the import bill climbing to $8.9 billion during July-March FY2025-26, energy demand remained closely linked to Pakistan's economic recovery while continuing to influence the country's external sector and trade performance.

Credit: INP-WealthPk