Aurangzeb says country's energy supplies stable Admits shortcomings in meeting gas, LNG demand Recalls country
Finance Minister Muhammad Aurangzeb. Photo: AFP
LAHORE:
Finance Minister Muhammad Aurangzeb on Saturday said Pakistan's crude oil and other energy supplies remained satisfactory despite escalating regional conflicts, seeking to allay concerns over a possible fuel crisis after lawmakers raised questions in the Senate about petroleum availability through December and the country's preparedness for further disruptions.
However, he acknowledged that additional measures would be needed to meet domestic gas and liquefied natural gas (LNG) requirements.
Addressing a ceremony at a private university in Lahore, Aurangzeb said Pakistan had so far avoided energy shortages, queues at petrol pumps and law-and-order problems arising from an energy crisis.
He said arrangements were in place to meet energy requirements until November, while preparations for the winter were continuing amid uncertainty over regional supplies.
His remarks followed Friday's Senate debate, during which Pakistan Peoples Party (PPP) Senator Sherry Rehman questioned whether petrol would remain available through December as the conflict in the Middle East intensified.
She called on the petroleum and energy ministers to brief parliament on contingency plans, including the possibility of rationing, and warned that disruptions to energy supply routes could have serious implications for Pakistan's energy security and economic stability.
Rehman also highlighted the country's dependence on imported liquefied petroleum gas (LPG), saying around 70 per cent of its requirements were met through imports and 30 per cent through domestic production.
Pakistan had received five LPG cargoes last year, while only two were expected this year, she told the Senate, demanding that the government present a clear supply plan.
Opposition leader Raja Nasir Abbas also warned that the widening regional conflict, stretching from Iran to Yemen, threatened key maritime chokepoints and could aggravate Pakistan's energy difficulties.
He pointed to an existing LPG shortage and flour shortages in Punjab, criticising political leaders for focusing on power struggles instead of public concerns. He also called on Pakistan to mediate between Yemen and Saudi Arabia.
Responding to concerns over fuel affordability in the Senate, Minister of State for Finance and Revenue Bilal Azhar Kayani had maintained that there was no fuel supply problem and said more than 10 million people were benefiting from targeted fuel subsidies.
He said motorcyclists were receiving Rs500 worth of free petrol per week, while owners of vehicles with engine capacities of up to 800cc were receiving Rs1,000 in relief on 10 litres of petrol. Assistance was also being provided to rickshaw and loader operators and users of small cars.
Aurangzeb said the government had taken effective measures to secure energy purchases and supplies despite regional conflicts. While the arrangements currently in place were sufficient to meet requirements until November, he acknowledged that further steps were necessary to address gas and LNG needs, with planning for the winter still under way.
Targeted relief reaches millions
The finance minister said the government had opted for targeted subsidies instead of general subsidies to ensure that relief reached those who needed it most.
Under the scheme, assistance had been extended to motorcyclists, users of three-wheelers and owners of vehicles with engine capacities below 800cc.
Aurangzeb said 12 million unique individuals had benefited from the scheme so far, while the total number of people benefiting from the relief was estimated at 40 million to 50 million.
Aurangzeb also highlighted improvements in Pakistan's economic indicators, saying information technology (IT) export services had grown from $1 billion to $4.6 billion. IT exports were expected to reach $5.5 billion during the current fiscal year, he added.
He said Pakistan's foreign exchange reserves had reached a record high and were sufficient to cover more than three months of imports. In contrast, he recalled, reserves in the past had fallen to a level sufficient to finance just two weeks of imports.
Aurangzeb said Pakistan's credit rating had improved three times since April last year, while significant steps had been taken to restore access to international financial markets.
The minister said Pakistan had undertaken a private placement in April this year, accessed international markets through the issuance of a Panda bond and issued bonds worth three billion euros in the first week of September.
He said orders received from investors for Pakistan's Eurobonds were twice the amount issued, reflecting interest from investors in Asia, the Middle East, Europe and the United States.
Aurangzeb said international investors were increasingly assessing Pakistan's economic outlook beyond its current programme with the International Monetary Fund (IMF), which is scheduled to conclude in October next year.
He maintained that Pakistan's economic stabilisation was being accompanied by structural reforms and that the process had moved beyond planning into implementation.