ISLAMABAD     -         The government spent $14.4 billion on the import of oil products during last fiscal year that put pressure on the country’s foreign exchange reserves.

Pakistan’s oil import bill had showed minor increase of 0.08 percent and recorded at $14.4 billion in last fiscal year 2018-19. Although, Pakistan’s overall import bill had reduced by $6 billion but oil’s import showed increase.

The country’s imports have recorded at $54.8 billion during the year 2018-19 as compared to $60.8 billion of the year 2017-18. The government had controlled the pace of soaring imports during ongoing fiscal year.  The imports have decreased by imposing Regulatory Duties (RD) on the imports of furnace oil and other luxury items of food and automobile.

According to Pakistan Bureau of Statistics (PBS), the import of petroleum products was recorded at $6.28 billion, petroleum crude at $4.57 billion and liquefied natural gas at $3.34 billion and liquefied petroleum gas at $250 million. Oil import bill is the major component of the overall import bill, which declined the country’s foreign exchange reserves.

However, the country had already finalized defer oil payment facility with Saudi Arabia and Islamic Development Bank to avert pressure on foreign exchange reserves. The oil facility provided by Saudi Arabia worth $3.2 billion per year for three years had become operational on July 1. Similarly, the Islamic Development Bank had also provided $1.2 billion deferred oil facility to Pakistan.

Apart from the oil, import of all other sectors has declined during previous current fiscal year. Food imports contracted 8.35 percent to $5.67 billion during in 2018-19, from $6.18 billion in corresponding months last year. This decline was largely due to a 9.66 percent fall in the value of dry fruits and nuts, which decreased by 56 percent in the period under review from previous year.

Import bill of the machinery clocked in at $8.9 billion during the last financial year, lower by 22.89 percent, from $11.57 billion in same period last year. The biggest contributor to the decrease was power generating machinery, which plunged by 52.6 percent, followed by 40.2 percent contraction in construction and 10.07 percent in telecom. Similarly, transport group, another major contributor to the trade deficit, also receded during previous current fiscal year as it posted a 29.6 percent decline, with decrease in imported value of almost all subcategories. On the other hand, agriculture imports inched down by 1.8 percent to $8.76 billion from $8.92 billion on the back of 4.09 percent decrease in fertiliser. According to the PBS data, Pakistan’s exports had reduced by 1 percent to $23 billion in last fiscal year from $23.2 billion of the preceding year.

Pakistan’s textile exports were recorded at $13.33 billion during last fiscal year. The country’s textile exports had gone down by 1.42 percent over the preceding year. The incumbent government had provided several incentives to the five exports oriented sectors including textile to enhance the country’s exports. The government had depreciated the currency and reduced the prices of electricity and gas but it failed to achieve the desired results.

In textile sector, according to PBS, exports of knitwear had enhanced by 6.92 percent during the year 2018-19 over a year ago. Similarly, exports of bed wear had also recorded an increase of 0.06 percent and exports of yarn had gone up by 1.21 percent. Meanwhile, exports of ready-made garments had also surged by 3.03 percent last financial year. The PBS data showed that exports of cotton cloth had recorded a decline of 4.64 percent. Similarly, exports of raw cotton had tumbled by 64.98 percent. Exports of cotton yarn witnessed decrease of 17.97 percent. Meanwhile, exports of towels had declined by 1.41 percent.

Meanwhile, the exports of food commodities had recorded decrease of 3.93 percent during the year 2018-19. In food commodities, exports of fruits recorded growth of 4.12 percent, vegetables exports declined by 2.31 percent and oil seeds, nuts and kernels exports had gone up by 99.57 percent.