Finance Minister Muhammad Aurangzeb says Pakistan has secured energy supplies through November but warns that prolonged damage to Gulf infrastructure could threaten economic recovery.
Pakistan has secured sufficient energy supplies to meet its needs through November and avoided immediate fuel shortages despite rising global energy prices linked to the Iran war, Finance Minister Muhammad Aurangzeb said, warning that continued attacks on Gulf energy infrastructure could threaten the country’s economic recovery.
In an interview with Agence France-Presse on the sidelines of the International Monetary Fund and World Bank annual meetings in Bangkok, Aurangzeb said the government was preparing for winter, when household energy consumption typically increases.
He said Pakistan had managed the initial energy shock without fuel shortages, long queues at petrol stations or law and order problems associated with disruptions to energy supplies.
The government also plans to avoid buying liquefied natural gas from the spot market unless absolutely necessary, Aurangzeb said. Spot-market cargoes generally cost significantly more than supplies secured through existing contracts, making them a potentially expensive option for a country facing economic constraints.
Gulf Energy Disruptions Pose Economic Risks
Global energy prices have surged since the United States and Israel launched military operations against Iran in February, prompting Tehran to retaliate against US allies in the Gulf and disrupting regional oil and gas supplies.
Renewed fighting involving Yemen’s Houthi movement has added to concerns over regional energy security. Attacks have reportedly targeted Saudi energy facilities and airports, raising fears that further damage could prolong disruptions to oil and gas supplies.
Aurangzeb warned that even if hostilities eventually subside, damage to critical energy infrastructure could delay the return to normal economic activity across the region.
He said repairing damaged facilities and restoring supplies could take considerable time, leaving countries dependent on imported energy vulnerable to prolonged price pressures and supply disruptions.
For Pakistan, which relies heavily on imported energy, sustained increases in international prices could complicate efforts to maintain economic stability and support recovery. The government’s preparations for winter and its preference for contracted LNG supplies reflect the importance of managing both availability and costs.
IMF Support Remains Central to Economic Stability
Pakistan continues to rely heavily on financial assistance from the IMF as it works to maintain economic stability. Since gaining independence in 1947, the country has entered 25 programmes with the lender, including at least 11 bailout arrangements.
Under its current three-year programme worth approximately $7 billion, Pakistan reached an agreement with the IMF this month to receive another $1.2 billion tranche.
The additional funding comes as the country faces external economic risks, including the potential impact of prolonged energy-market volatility.
Aurangzeb’s warning highlights the uncertainty surrounding Pakistan’s economic outlook. Although the country has so far avoided immediate supply disruptions, a prolonged regional crisis could increase energy costs and place additional pressure on its recovery.
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