In August 2023, Pakistan experienced a significant upswing in the demand for petroleum products, witnessing a 4% increase, which brought the total to 1.41 million tonnes. This surge in demand can be attributed to several factors, including the anticipation of price increases in petrol and diesel, a genuine rise in demand, and a resurgence of agricultural activities within the country.

According to data compiled by local research organizations, oil sales in July 2023 had previously stood at 1.35 million tonnes. This remarkable increase in demand for petroleum products has garnered attention from various experts and analysts.

What Experts Analyze?

As per the experts, “the modest increase in demand can be partially attributed to the expectation of fuel price hikes in the reviewed month. Businesses, industrialists, and agriculturalists appear to have stockpiled these products as a precaution against potential price increases.”

Certainly, the government had implemented a cumulative 10% increase in petrol and diesel prices, divided into two installments throughout the month of August. This decision had been highly anticipated, especially given the concurrent upward trend in global petroleum product prices. 

Moreover, data on imports and exports have shown a substantial improvement in economic activities during the same period, which further bolstered the heightened demand for petroleum products.

A noteworthy 11% surge in diesel sales, in contrast to a more modest 2% uptick in petrol sales, indicates an increased level of transportation activity between ports and factories, as well as a greater movement of agricultural products from farms to markets. 

The agricultural sector played a pivotal role in driving this surge, given that August is a critical season for the cultivation of cash crops such as rice, cotton, and sugarcane. The cultivation of these crops involves extensive use of diesel-powered tractors and machinery.