The Pakistani Rupee has depreciated more than 30% in the last year and has fallen to a record low, hitting the Rs 240 mark recently. This will significantly increase the country’s fuel import bill.
The economic pressure on Pakistan can be measured by the fact that net international reserves (RIN) are at less than $10 billion. This equates to just six weeks from import.
The rupee will have additional pressure as the IMF loan disbursement is expected around mid-August.
“Even if the IMF does materialize cash deposits in the future, they will only cover the country’s imports for up to eight weeks,” a panel of experts said.
During a press conference on current economic challenges related to energy imports, the Minister of Finance assured the country about the flow of capital of $8 billion in the form of deferred payments of oil and LNG, the right of special drawings (SDR) and deposit .
Pakistan’s NIRs are alarmingly negative $5 billion. Additionally, the 12-month current account (CAD) deficit stands at $16.8 billion (4.7% of GDP) and is expected to trend lower.
Despite declining inventories, reports show the country imports petroleum products and crude oil at record highs, both in volume and value, they added.
In June 2022, crude oil imports peaked at 1.12 million tonnes ($838.79 million) from 0
763 million tonnes ($538.67 million) in the previous May. In the same month of last year, imports amounted to 0.816 million tons (US$382.68 million).
Crude oil imports by volume increased by 46.78% month-on-month and by 37.2% compared to June 2021. In dollar terms, up 55.72% month-on-month and up 119.2% compared with the same month of the previous year.
In fiscal year 22 (July to June), imports of the oil group increased by 105% to a record high of $23.3 billion.
Imports of petroleum products increased by 133% to 12.07 billion USD, crude oil imports increased by 80