Pakistan Experiencing Strong Growth in Energy Consumption

[Riaz Haq]

Pakistan's energy consumption grew by 5.7% in 2015, faster than the 5.2% increase in neighboring India that claims significantly faster GDP growth. Primary energy consumption growth in a country is often seen as a strong indicator of its GDP growth. Ever since the advent of the industrial age, energy has become increasingly important as a driver of farms, factories, communication, transportation, construction, retail and other sectors of the economy.   In addition to energy, other important economic indicators include cement and steel consumption, auto sales and air travel which are also growing significantly faster in Pakistan than in India.

Pakistan Primary Energy Consumption Trend (Source: British Petroleum)

Primary Energy Consumption:

According to British Petroleum Statistical Review of World Energy released in June 2016,  the primary energy consumption in Pakistan rose to 78.2 million ton oil equivalent (MTOE) in 2015, compared with 73.2 MTOE in 2014 confirming greater economic activity. It was the third fastest growth in energy consumption in Asia. Only the Philippines (9.7%), Vietnam (9.6%) and Bangladesh (8.7%) saw faster growth than Pakistan's.

Domestic Cement Demand:

All-Pakistan Cement Manufacturers’ Association reported cement industry sold 33 million tons in domestic market in fiscal year 2015-16, posting a robust growth of 17.01 per cent compared to the 28.2 million tons sales during the same period in 2015.

Local Auto Production:

Domestic auto production in Pakistan jumped by 21.57 percent (vs 2.58% growth in India) in fiscal 2016 compared to fiscal 2015, according to data from Pakistan Automobile Manufacturers Association. The data collected by Pakistan Bureau of Statistics (PBS) noted that as many as 168,363 jeeps and cars were manufactured during July-May (2015-16) while 138,490 units were produced last year(July-May 2014-15).

Rising Steel Demand:

Pakistan is experiencing 30% growth in steel imports, according to the State Bank of Pakistan. Local steel production is about 6 million tons. In addition, Pakistani imports of steel this year could surpass $2 billion as China-Pakistan Economic Corridor CPEC-related projects ramp up.

Air Travel Growth:

Pakistan air travel market is among the fastest growing in the world.  IATA (International Air Transport Association) forecasts Pakistan domestic air travel will grow at least 9.5% per year, more than 2X faster than the world average annual growth rate of 4.1% over the next 20 years. The Indian and Brazilian domestic markets will grow at 6.9% and 5.4% respectively.

Pakistan saw 23% growth in airline passengers in 2015, according to Anna Aero publication. Several new airports began operations or expanded and each saw double digit growth in passengers. However,  Gwadar Airport growth of 73% was the fastest of all airports in Pakistan.

The top 12 airports all saw large double digit increases. Multan  grew 64%, Quetta 62% and Faisalabad +61% all climbing one place as a result of all of them seeing a growth of over 60%. Turbat Airport in Balochistan is the newest airport to reach the top 12 in terms of traffic.

Mobile Broadband Uptake:

Mobile broadband subscriptions have rocketed from zero to over 30 million in just two years since 3G/4G service rollout in Pakistan. Rapid growth is continuing with over 1 million new subscribers are signing up for 3G and 4G services every month. An equal or larger number of smartphones are are being sold.

Summary:

A whole series of indicators from auto and steel to manufacturing and construction and telecom services are confirming that economic growth is accelerating in Pakistan. Among the reasons for this growth are significantly improved security situation, political stability and soaring Chinese foreign direct investment (FDI) in CPEC related energy and infrastructure projects.  These indicators are attracting investors who have already made Pakistan Stock Exchange the hottest shares market in Asia.  KSE-100, Pakistan's main shares index, is up 18% year-to-date compared to 6% increase in India's BSE-30 index. The challenge for Pakistan is to continue to improve security and political stability to reassure investors of superior returns from their investments in the country.

Related Links:

Haq's Musings

Politcal Stability Returns to Pakistan

Auto and Cement Demand Growth in Pakistan

Pakistan's Red Hot Air Travel Market

China-Pakistan Economic Corridor FDI

Mobile Broadband Subscriptions and Smartphone Sales

Pakistan in MSCI Emerging Market Index

[Riaz Haq]

#Pakistan Total Primary #Energy Consumption in 2016: 83.2 million tons of #oil equivalent (MTOE), up 7.6% from 2015. Source: BP Statistical Review of World Energy

https://www.bp.com/content/dam/bp/en/corporate/pdf/energy-economics... …

https://twitter.com/haqsmusings/status/1034450542779486208

[Riaz Haq]

https://www.ceicdata.com/en/indicator/pakistan/oil-consumption

Pakistan oil consumption 588,000 barrels per day in 2017

https://www.ceicdata.com/en/indicator/pakistan/natural-gas-consumption

Pakistan gas consumption 3.94 billion cubic feet per day

[Riaz Haq]

Top 10 countries with lowest energy consumption per capita
Outside Africa, Bangladesh, Pakistan and the Philippines stand out for low energy security


https://www.fdiintelligence.com/content/data-trends/top-10-countrie...


Outside Africa, fast-growing Asia economies such as Bangladesh, Pakistan and the Philippines use the least primary energy per capita, according to the latest BP Statistical Review of World Energy.

People in East Africa, Central Africa and Western Africa use 4.7, 5.7 and 7.2 gigajoules of primary energy per capita per year, respectively, the review notes. Primary energy is that classed as an energy source that has not been subject to any human-engineered conversion processes.

While energy use in these regions matches typically subdued levels of economic development, that is not the case in Bangladesh, Pakistan and the Philippines — countries with few indigenous energy commodities where energy infrastructure has struggled to keep up with the accelerating economic growth of the past years.

Per capita energy consumption in Bangladesh stands at 9.9 gigajoules, BP data shows — the lowest of any country outside Africa. Pakistan consumes 17.1 gigajoules and the Philippines consumes 17.6 gigajoules. By contrast, the average for countries in the OECD is 167.9 gigajoules, while stands at 56.2 gigajoules in non-OECD countries.

Bangladesh has resorted to Russian technology and financing to build the country’s first nuclear plant and thus limit the country’s recurrent power outages, while Pakistan, which already has six nuclear power plants in operation, has been developing liquified natural gas terminals to bump up imports of LNG.

After Sri Lanka, with 17.8 gigajoules, and the Southern Africa region (excluding South Africa) with 23.5 gigajoules, the top 10 is rounded out by two other emerging economic powerhouses — India and Morocco.

India, with 23.3 gigajoules per capita, continues to generate most of the primary energy it through coal and oil. The country is the world’s second-largest consumer of coal after China, although its first renewable energy generation has also come online in the past few years.

Morocco, with 25.6 gigajoules per capita, gets most of its primary energy from oil, although the country boasts the world’s biggest thermal solar power plant, and its renewable energy potential is now being assessed for major cross-border energy generation projects.