The country’s auto industry is not the only sector grappling with economic uncertainties; the oil industry in Pakistan, in a surprising twist of fate, is also feeling the heat. As per the tweet of economist Adul Rehman, July ’23 marked a significant low for the energy sector as it went by without a single import of diesel. This unexpected turn has sparked discussions and raised eyebrows across the industry, hinting at potential shifts in the global energy landscape.

After many months, 🇵🇰🇵🇰 did not import any diesel in July.

– Economic slowdown: demand down from 22KT per day to 15KT

– Unofficial imports from Iran

Trend is likely to continue in the next few months as well.

— Abdul Rehman (@AbdulRehman0292) August 21, 2023

The diesel industry has always been closely tied to economic activities and consumer demand. In recent times, however, a noticeable economic meltdown has had a profound impact on the demand for diesel. Earlier, diesel consumption had peaked at a staggering 22,000 metric tons (KT) per day. However, the slowdown has led to a significant drop in demand, which currently hovers around 15,000 KT per day. This reduction in demand reflects the broader economic challenges faced by industries and consumers alike.

Furthermore, unofficial imports; suffice to say, smuggling of oil particularly from Iran, have been playing a role in shaping the recent dynamics of the diesel market. These off-the-books transactions have had a dual impact: reducing the need for formal imports and causing an air of uncertainty in the market.

Record High Petrol Price

Last week, the interim government increased petrol prices by Rs. 17.50 per litre taking it to the whopping Rs. 290.45 per litre. Surprisingly enough, this move comes right after the 15 days, on August 1st, when previous government, part of the PDM coalition, raised petrol prices by Rs. 19.95.

This abrupt increase has unleashed a cascade of economic repercussions, leaving the masses grappling with the burden of escalated living costs. The impact of these soaring petrol rates extends beyond just the fuel pump, seeping into various aspects of daily life and amplifying the challenges faced by an already vulnerable segment of society.