ISLAMABAD: The Senate Standing Committee on Finance was informed on Thursday that Pakistan had increased petroleum prices to prevent a disruption in fuel supplies and extreme volatility in the global market, which had made imports further complicated.
During the proceedings of the Senate Standing Committee on Finance and Revenue, which met under the chairmanship of Senator Saleem Mandviwalla at the Parliament House, both Minister for Finance Muhammad Aurangzeb and Minister for Petroleum Ali Pervez Malik briefed parliamentarians from the Upper House on the consequences of evolving regional situation and its impact on Pakistan’s economy. They argued that the government had to take urgent decisions to avert supply disruptions and maintain fuel supplies in the country.
Petroleum Minister Ali Pervez Malik said the regional conflict had caused extreme oil price volatility and made shipments harder to secure. LNG cargoes from Qatar had surged from about $25 million to $100 million, while oil from Saudi Arabia could take 15-20 days to arrive. He warned that without price increases, companies might halt imports, risking shortages, while replacing $70-per-barrel oil with $120 imports could add to circular debt.
Senator Farooq H. Naek of the PPP criticised the decision, saying the government had increased the petrol prices by Rs55 per litre on the older stock and had effectively shifted the burden onto ordinary citizens. “Israel fired missiles and you fired a petrol missile on the people of Pakistan,” he said, asking whether the government would reduce the prices if global oil prices declined.
Finance Minister Muhammad Aurangzeb told lawmakers Pakistan was facing a “war-like economic environment” due to regional tensions and said the government was closely monitoring the global oil markets while trying to manage prices. Petroleum Minister Ali Pervez Malik said Iran’s LPG supply had not been disrupted so far and there was no proposal to increase the LNG prices.
The finance minister cautioned, however, that if regional tensions continued for several weeks, they could affect Pakistan’s external financing, inflation outlook, revenue targets and current account balance.
