Fuel imports dropped 9.27% year-on-year in the July-January period of FY23 as record-high inflation curtailed overall demand amid prevailing economic uncertainty in the country.
The highest-ever increase in prices led to lower consumption of petroleum products. The total import value of fuel fell to $10.61 billion in 7MFY23 from $ 11.69 billion over the corresponding months of last year.
According to the data released by the Pakistan Bureau of Statistics (PBS), the imports of petroleum products declined by 14.73% in value during 7MFY23 and 33.74% in quantity. Similarly, the imports of crude oil decreased by 13.53% in quantity while the value increased by 10.90%.
Read more: Weekly inflation spiked at 38.4%
Additionally, liquefied natural gas (LNG) imports also fell by 20.84% in 7MFY23 on a year-on-year basis. This resulted in relatively lower LNG-based power generation and a replacement for furnace oil. However, liquefied petroleum gas (LPG) imports spiked by 8.26%.
In January, total oil imports fell 12.42% to $1.32 billion, from $1.51 billion in the same month last year.
Machinery imports plunge
For many years machinery imports have been a major reason for the growing trade deficit, but it registered negative growth of 45.15% to $3.73 billion in 7MFY23 against $6.80 billion last year with a year-on-year decline of 61.01%. Moreover, the imports of textile, office, and power-generating machinery also decreased during the period due to economic instability and import restrictions by the government.
Despite being the second largest group of imports, the food imports grew only 7.01% to $3.73 billion in the 7MFY23 against the previous year.
Read more: January CPI spikes to 27.5%
The short-term inflation rate was slightly lower in the last week at 34.83% and on a week-on-week basis, SPI increased 2.89% against 0.17%. This is the highest weekly rise since October 27, last year.
Conclusively, inflation is expected to increase further in the coming months as government seeks to implement the International Monetary Fund’s (IMF) conditions a $1.2 billion economic bailout.