Finance Minister Muhammad Aurangzeb has said Pakistan has managed the initial impact of rising global energy prices triggered by the war involving Iran, but attacks on energy infrastructure in Saudi Arabia and other Gulf countries pose serious risks to the country’s long-term economic outlook.
Speaking in an interview on the sidelines of the International Monetary Fund (IMF) and World Bank annual meetings in Bangkok, Aurangzeb said Pakistan had secured its energy requirements until November and was now planning supplies for the winter months, when domestic demand typically increases.
He said the country had so far handled the initial effects of the energy crisis effectively, avoiding fuel shortages, long queues at petrol stations and law-and-order problems witnessed in some other countries.
The finance minister said the government would avoid purchasing liquefied natural gas (LNG) from the spot market unless absolutely necessary, as such imports were generally more expensive than supplies secured under existing contracts.
Expressing concern over the escalating situation in the Middle East, Aurangzeb said damage to energy infrastructure could delay the normalisation of economic activity, even if regional tensions eased.
“The most concerning aspect for me is that energy infrastructure is now being targeted,” he said, warning that continued attacks could prolong the disruption.
Aurangzeb added that it remained difficult to predict how far the situation could escalate, but stressed that damage to critical infrastructure would make a return to normal conditions more challenging.
Discussing Pakistan’s economic reforms, the finance minister said the government had maintained its focus on fiscal discipline and economic stability in recent years.
He noted that tax revenues had increased significantly, while authorities were taking action against businesses that collected sales tax from consumers but failed to deposit the money into the national treasury.
According to Aurangzeb, such tax evasion results in losses worth billions of dollars, while there remains considerable scope to improve income tax collection.
He acknowledged that the government’s reform agenda faced resistance from industries, pressure groups and vested interests, saying efforts to change existing systems inevitably encountered opposition.
The energy concerns follow a sharp increase in global prices after the war involving Iran began in February, with retaliatory actions affecting US allies in the Gulf and disrupting oil and gas supplies.
Meanwhile, renewed fighting in Yemen has added to regional uncertainty, with Houthi forces reportedly launching attacks on Saudi energy facilities, airports and other critical infrastructure in recent days.