The demand for petroleum products in Pakistan increased significantly in August 2023, by 4%, reaching 1.41 million tonnes. A number of variables, including the likelihood that the price of petrol and diesel will rise, actual demand growth, and a revival of agricultural activity in the country, might be blamed for this rise in demand.
Previously, 1.35 million tonnes of oil were sold in July 2023. Several experts and researchers have drawn attention to this remarkably rising demand for petroleum products.
Experts Analyze:
The analysts claim that “the minor rise in demand can be somewhat related to the expectation of petrol price increases in the reviewed month. Businesses, industries, and farmers appear to have stockpiled these products as a hedge against projected price increases.
Undoubtedly, the government had increased the cost of petrol and diesel by a total of 10% during the month of August, in two installments. This choice had been eagerly anticipated, especially in light of the concomitant rise in the price of petroleum products around the world.
Data on imports and exports also revealed a significant boost in economic activity during the same time period, which supported the increased demand for petroleum products even more.
A notable 11% increase in diesel sales, compared to a relatively moderate 2% increase in petrol sales, suggests increased transportation activity between ports and factories, as well as increased transfer of agricultural goods from farms to markets.
Given that August is a crucial season for the cultivation of cash crops like rice, cotton, and sugarcane, the agricultural sector had a crucial part in causing this spike. These crops are grown using a lot of equipment and tractors with diesel engines.