By Muhammad Mudassar ISLAMABAD, Mar. 09 (INP-WealthPK): In the first seven months of FY 2021-22 (July to January), car sales surged by 61.5% as compared to the same period of the previous fiscal year, according to a report released by Pakistan Automotive Manufacturers Association (PAMA). Increased car sales have significant benefits by contributing to the national exchequer in terms of tax revenues and employment generation to some extent. On the other hand, it causes a great deal of pressure on the energy products because around 76.6% (8.77 million tons) of total oil products (11.45 million tons) were consumed by transport sector during the first six months (July-Dec) of FY 2021-22, as compared to 77.2% in the first six months (July to Dec) of FY 2020-21, according to Pakistan’s Oil Companies Advisory Council (OCAC). Number of automobiles sold

Vehicles	July- Jan 2020-21	July- Jan 2021-22	% Change
Total cars	81,569	131,759	61.53073
Total trucks & buses	2,310	3,840	66.23377
Total jeeps & pick-ups	15,900	24,827	56.14465
Total tractors	27,100	31,445	16.03321
Total 2/3 wheelers	1,113,435	1,091,795	-1.94354
Total	1,240,314	1,283,666	3.495244

Pakistan relies on imported oil to meet about 80% of its demand. Pakistan’s oil import bill surged by 107.35% to $11.69 billion in the first seven months of FY 2021-22 as compared to $5.64 billion in the same period of the previous fiscal. Furthermore, oil prices in the international market are surging and have reached over $103 per barrel due to geopolitical tensions between Russia and Ukraine. Russia is the world's second largest exporter of crude oil and the largest exporter of natural gas as well. Pakistan's economy suffered greatly as a result of the oil price volatility. Rising oil prices affected all segments of the economy. According to Pakistan Bureau of Statistics (PBS), the year-on-year inflation rate in January 2022 was 12.96% when compared to January 2021. Due to increase in the sales of automobiles, the demand for oil will definitely increase. Consequently, there will be an increase in the trade deficit and possible currency devaluation. Due to the growing number of automobiles, environmental issues have also increased. Fuel oil is one of the major sources of greenhouse gas emissions (GHGs) with a 30 percent share. The government is taking steps to promote electric vehicles by announcing the first electric vehicle policy 2020-25. Under this policy, the government has incentivized the consumers through tax (sale tax, tool tax) incentives, and investors through tax (import duties) incentives on equipment import. Electric vehicle is one of the best options to tackle the issue of climate change and reliance on imported oil. The electricity sector is the second largest consumer of oil. There is a need to shift to renewable energy sources to reduce oil consumption. The government should also promote public transportation. As a result, the number of private vehicles will decrease. This will reduce the consumption of oil and congestion.