Oil production, consumption & prices | By Muhammad Zahid Rifat


AFTER World War 11 had ended, the Middle East countries also took the lead in oil production from the United States.

Petroleum exploration in areas comprising Pakistan began more than a century ago.

The first well was drilled in 1866 at oil seepage Kundal in Mianwali district right after seven years of the world’s first well.

Activities continued during last quarter of the 19th century with sporadic attempts to drill shallow boreholes , as in the rest of the world, the earlier exploration focused on seepages.

Discovery of oil at a location in Balochistan was the main success where 13 shallow wells had produced 25000 barrels of oil between 1885 to 1892.

The Indian Government controlled the drilling activities during this early phase. Up to 1883, a number of shallow wells were drilled by the government agencies all near seepages.

However, due to rapid decline in production, the government agencies subsequently lost their interest in oil exploration.

Pakistan’s first oil field was discovered in the late 1952 in Balochistan near giant Sui gas field.

The Toot oil field, located in Pothohar Region, is one of the oldest oil producing regions in Pakistan where the first oil well was drilled in 1964 when President Ayub Khan has encouraged a mineral development policy.

There are about 60 million barrels of oil in place out of which 12 to 16 per cent is recoverable.

At the peak during 1986, the field was producing approximately 2400 barrels of oil per day. It has grown steadily since then, producing both oil and to a lesser degree, natural gas.

Oil production entirely continued in Pothohar Plateau till 1981 when Union Texas Pakistan discovered the first oil field in Lower Sindh .

The Oil and Gas Development Corporation (OGDC) discovered Tut oil field in 1967, Pakistan Oil Limited discovered Meyal oil field in 1968 and encouraged by these discoveries, a number of foreign companies started showing interest in Pakistan.

There has not been any major oil and gas discoveries in the country for a number of years.

There is dire need for accelerating oil drilling and exploration to boost domestic oil production and also for formulating and strictly enforcing POL Products Conservation Policy for gradually reducing the country’s oil import bill as much as possible.

Pakistan hardly meets about 15 per cent of its energy needs through local oil and gas production and the remaining requirements of about 85 per cent are met through expensive imports from oil producing countries in the international market.

The oil and gas imports alone cost Pakistan around one-fourth of total import bill every year.

And only recently, more than couple of years back, Pakistan has also emerged as one of the largest Liquefied Natural Gas (LNG) importers at the international level.

The consumption of petroleum products (energy products) in Pakistan is 19.68 million tonnes per annum against supply of 11.59 million tonnes per annum from local refineries while rest of the 8.09 million tonnes is being imported annually to meet the ever growing demand domestically. Pakistan imports $15-$ 16 billion worth of oil annually .

In terms of POL products consumption, one can just have a look on the all sorts of vehicles plying on the roads in the urban and rural areas.

POL products consumption is done both in the public and private sectors to meet the essential as well as non-essential requirements as more and more vehicles keep coming on the road and lesser numbers going off the road.

Vehicles, both light and heavy, one sees on roads everywhere include motor cycles (2 wheels), motor cycles (3 wheels) motor cars jeeps and station wagons, motor cabs/ taxis, buses, trucks and others.

Figures are available but are being skipped over for not bothering the readers quite unnecessarily in this regard.

Ours is a nation, one can mention this regretfully, which consumes a lot and produces very little and the increasing demands in all respects are met through imports .

Economically supply and demand causes the price hike when the supply is less than the demand.

As for prices structure of POL products is concerned it is regulated by Oil and Gas Regulatory Authority (OGRA).

Sometime back POL products prices were upped or lowered by OGRA on a monthly basis. But now, this exercise is being undertaken on fortnight basis in accordance with the prevailing trends in the international market.

OGRA sends its recommendations for consideration and approval or otherwise by the Prime Minister and afterwards new prices are notified by the Finance Ministry.

PTI’s Federal Government headed by Prime Minister Imran Khan, needless to say, is focusing on welfare of the people right from the first day of its coming into power against all heavy odds and problems.

This is also ensured in the determination of POL products prices fortnightly in the country.

It may be mentioned here that the Prime Minister has already turned down OGRA’s summaries for upward revision of POL prices more than thrice in a row during last couple of months.

In doing so, the Federal Government itself bears the difference in the POL products prices compared to the prevailing rates in the international market.

The government as such has no control over fluctuation of oil prices in the international market to say the least.

The Federal Government is determined and committed to only passing on the increase in the POL products prices to the people only when it is left with no other choice.

It is also worth pointing out that the POL products so fixed by the incumbent government are comparatively the lowest than those fixed by the two previous governments during their tenures showing no consideration for the peoples’ welfare.

Previous governments had also kept US Dollar artificially at the lowest compared to the market value thus causing frequent depreciation of Pakistani Rupee.

Exchange rate of Pakistani Rupee viz a viz US Dollar has since been made quite realistic and still the government is ensuring to the maximum extent to maintain the POL products prices at the reasonable level.

Pakistan ranks No 18 while India is at 31, Sri Lanka 21, Nepal 22, Bangladesh, China 26, United Kingdom 36 and Germany 33 in the ranking of the cheapest petroleum countries out of 167 countries.

—The writer is Lahore-based senior journalist, columnist and retired Deputy Controller (News), Radio Pakistan, Islamabad.

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