Pakistan economy burdened as oil imports hit record

ISLAMABAD
Pressed by this growing demand, and to ease pressures on the balance of payments, the government has annnounced incentives and tax breaks for foreign and domestic producers of oil and gas in the form of the just-unveiled Petroleum Exploration and Production Policy (PEPP)-2007.

The State Bank of Pakistan (SBP), the central bank, for which it was officially issuing foreign exchange, has now shifted a part of the growing oil import bill to the inter-bank forex market, in order to conserve the official reserves.

A 10 per cent rise is indicated in petroleum group imports for the just ended fiscal 2007. The amount spend on imports reached a record $ 7.34 billion, or 24.3 per cent of the overall imports. Oil imports, at $7.34 billion in fiscal 2007 were 9.96 perc ent higher compared to $ 6.675 billion in 2006, Federal Bureau of Statistics (FBS) reported this week. The increase was more pronounced because of ‘the surge in quantity’ of imported oil and petroleum products, besides the rising oil prices, the FBS said. Saudi Arabia, UAE, kuwait and the Gulf are the key sources of crude oil and petroleum products imported by Pakistan.

Kaleej Times