The decrease in demand is attributed to several factors, including a substantial petroleum development levy (PDL) of Rs60 per liter on petrol and diesel
ISLAMABAD: Crude oil and gas production in Pakistan have both experienced a notable decline over the past decade, according to recent data from the Pakistan Petroleum Information Service (PPIS). The country’s crude oil output has decreased from 94,500 barrels per day in 2015 to 70,500 barrels per day in 2024. Despite this decline, there was a modest annual increase of 1.5 percent in oil production in the fiscal year 2024, reaching 70,536 barrels per day.
Similarly, gas production has faced a significant reduction. Daily gas output dropped from 4,016 million cubic feet per day (MMCFD) in 2015 to 3,116 MMCFD in 2024, reflecting an annual decline of 4.4 percent. This trend underscores the challenges faced by Pakistan’s energy sector in maintaining production levels amid fluctuating demand and other economic pressures.
In the fiscal year 2023-24, ending on June 30, demand for petroleum products reached an 18-year low, with consumption falling to 15.3 million tons. This decrease in demand is attributed to several factors, including a substantial petroleum development levy (PDL) of Rs60 per liter on petrol and diesel. The government’s collection of approximately Rs1 trillion in PDL highlights the impact of this levy on consumer behavior.
The significant drop in petroleum product demand was also influenced by the full pass-through of rising global energy prices to local consumers. Additionally, the overall economic slowdown, sluggish industrial output, high inflation, and elevated interest rates contributed to reduced industrial and commercial consumption. Households, too, curtailed travel and energy usage in response to rising costs.
Despite these challenges, there was a notable rebound in petroleum product demand in the final month of FY24. Consumption surged to a 19-month high of 1.45 million tons. This increase was driven by a reduction in energy prices and a heightened reliance on costly furnace oil-run power plants to meet the increased electricity demand during the intense summer heat.
This rebound indicates a complex interplay between energy prices, production levels, and consumer demand. As Pakistan continues to navigate these economic and energy challenges, the sector’s ability to adapt and respond to both domestic and global pressures will be crucial in shaping the future trajectory of the country’s energy landscape.
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