Decline in Pakistan’s Crude Oil and Gas Production

Over the past decade, Pakistan has experienced a significant decline in its crude oil and gas production, according to data from the Pakistan Petroleum Information Service (PPIS). From 2015 to 2024, crude oil production fell from 94,500 barrels per day to 70,500 barrels per day, while gas production decreased by 900 million cubic feet per day (MMCFD).

Crude Oil and Gas Production Trends

In 2015, Pakistan’s daily gas production stood at 4,016 MMCFD, but by 2024, it had dropped to 3,116 MMCFD, marking an annual decline of 4.4%. However, the 2024 fiscal year saw a slight increase in oil production, rising by 1.5% to 70,536 barrels per day. Despite this uptick, the overall trend reflects a sharp reduction in the country’s energy output over the years.

Impact on Petroleum Demand and Government Revenues

The fiscal year 2023-24 witnessed the demand for petroleum oil products reaching an 18-year low, at 15.3 million tonnes, as of June 30. The government, however, managed to collect an estimated Rs1 trillion in petroleum development levy (PDL) from the sale of oil products during this period.

The collection of PDL at Rs60 per litre on petrol and diesel, combined with the full pass-through of global energy price increases to local consumers, was a major factor behind the sharp drop in demand. Other contributing factors included the overall economic slowdown, sluggish industrial output, high inflation, and elevated interest rates, which collectively discouraged industrial, commercial, and household consumers from maintaining their usual levels of energy consumption.

Revival in Petroleum Product Demand

In the final month of FY24, the demand for petroleum products saw a revival, reaching a 19-month high of 1.45 million tonnes. This resurgence was driven by a notable reduction in energy prices and the increased reliance on expensive furnace oil-run power plants to meet the surge in electricity demand during the intense summer heat.