Aurangzeb says attacks on Gulf energy infrastructure are “worrying” for Pakistan’s economic outlook
BANGKOK: Finance Minister Muhammad Aurangzeb said on Saturday that Pakistan had so far weathered the shock of soaring energy prices from the US-Israeli war on Iran, but warned that attacks on energy infrastructure in Saudi Arabia and other Gulf countries were “worrying” for the country’s longer-term economic outlook.
Speaking to AFP on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Aurangzeb said the Gulf energy infrastructure attacks were “worrying” for the country’s longer-term economic outlook. Pakistan had secured enough energy supplies to last through November and was now planning for the winter months, when household demand normally rises.
First-order impact “negotiated well”
“The first-order impact has been negotiated well by Pakistan,” the minister said. “We’ve had no shortage, no queues at the gas stations, and no law and order situation, which at times we have seen in some of the countries.”
He added that unless the government saw “an absolute dire need”, it would not buy spot LNG cargoes, which cost far more than previously contracted shipments.
The position sharpens an earlier plan. Feature Pakistan reported on October 2 that Pakistan intended to buy 25-26 LNG cargoes for the winter months with an eye on a $26-27 price cap. Saturday’s remarks suggest Islamabad will hold back on expensive spot purchases for now and lean on contracted supplies instead.
Why the Gulf attacks change the calculation
The United States and Israel launched the war on Iran in February. Global energy prices surged as Tehran’s retaliation targeted Washington’s Gulf allies and squeezed oil and gas supplies.
The flare-up of Yemen’s civil war has added pressure. Houthis there have repeatedly struck Saudi infrastructure in recent days, including energy facilities and airports.
“What is now (the) worrying part of it is when the energy infrastructure starts getting hit,” Aurangzeb said. “I, to be very honest, I don’t know where that would go. But one thing is very clear: that if the infrastructure continues to get hit, the return to normalcy, even if things subside, will take longer.”
The IMF programme and the reform push
Pakistan has turned to the IMF frequently — it is on its 25th programme with the lender of last resort since 1947, at least 11 of them outright bailouts.
The minister is leading Pakistan’s delegation in Bangkok and holding meetings with financial institutions, finance ministers, policymakers and investors. On Friday, he met World Bank Group President Ajay Banga at a dinner hosted by the Thai prime minister, state-run Pakistan TV reported.
Pakistan remains engaged with the IMF under a $7 billion Extended Fund Facility and a $1.4 billion Resilience and Sustainability Facility. Earlier this month, the two sides reached a staff-level agreement after a fourth review under the EFF and a third under the RSF, qualifying Pakistan to draw about $1.2 billion. Feature Pakistan covered that agreement on October 8.
At the annual meetings, the IMF urged all economies — even those hit hardest by the Iran war shock — to pursue fiscal consolidation. “Fortunately for us, we have been on this fiscal consolidation path for a while,” Aurangzeb said with a rueful smile.
Tax revenues have grown strongly in recent years, he said. The government is now going after sales-tax theft by private businesses that collect the tax from consumers but never deposit it in government accounts — theft worth billions of dollars. He conceded there was “room for improvement” on income-tax collection too.
Reform has met resistance. “Every reform, everything that you try to do when you try to change the status quo, there is pushback,” the minister said, pointing to industry, lobbying groups and vested interests.
What it means for Pakistani households
For households, the immediate message is reassuring: no fuel shortages, no panic at the pumps, and no emergency spot buying that would push costs onto consumers.
Related reporting:
- Pakistan, IMF reach staff-level deal for $1.2 billion
- Pakistan to buy 25-26 LNG cargoes for winter, eyes $26-27 price cap
- Vitol warns oil could hit $200 a barrel as Hormuz tanker crisis deepens
- IMF praises Pakistan’s oil crisis handling, presses for faster gas reforms
- Will Pakistan default? — full guide
Source: Dawn
Frequently asked questions
What did Aurangzeb say about Gulf energy attacks?
He called attacks on energy infrastructure in Saudi Arabia and other Gulf countries “worrying” for Pakistan’s longer-term economic outlook, warning they would delay a return to normal prices even after the fighting subsides.
Is Pakistan facing fuel shortages?
No. The minister said there have been no shortages, no queues at petrol stations, and no law-and-order problems, adding that energy supplies have been secured through November.
Will Pakistan buy expensive spot LNG cargoes?
Only in “an absolute dire need”. Spot cargoes cost far more than contracted shipments.
Where does Pakistan stand with the IMF?
Pakistan is under a $7 billion EFF and a $1.4 billion RSF. A staff-level agreement after recent reviews has qualified it to draw about $1.2 billion from the Fund.
