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Fuel shortages loom amid Pakistan’s economic woes

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Fuel shortages loom amid Pakistan's economic woes

Pakistan could face a crunch in fuel supplies in February as banks have stopped financing and facilitating payments for imports due to depleting foreign exchange reserves, traders and industry sources said.

The country is facing a balance of payments crisis and the plummeting value of the rupee is pushing up the price of imported goods. Energy comprises a large chunk of the import bill.

Pakistan typically meets more than a third of its annual power demand using imported natural gas, prices for which shot up following Russia’s invasion of Ukraine.

“There is no shortage this fortnight. If we don’t have LCs (letters of credit) open right now, we might see shortages in the next fortnight,” a senior official at one of the oil companies told Reuters.
A letter of credit issued by the importer’s banks is a standard form of payment guarantee in the oil trade to the exporter.

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Oil traders, however, are shunning countries such as Pakistan and Sri Lanka due to an acute shortfall of foreign exchange. Pakistan on Sunday raised petrol and diesel prices by 16 per cent to Rs249.80 a litre and is in talks with the International Monetary Fund to unlock a suspended bailout package.

State-owned refiner Pakistan State Oil (PSO) and Pakistan LNG Ltd have left a flurry of fuel tenders unawarded in the last couple of months.

At an industry meeting on financial challenges faced by fuel importers, State Bank of Pakistan officials cited “severe liquidity issues” faced by the country for delays in the opening of LCs, according to a Jan 19 letter from Imran Ahmed, director general of oil, reviewed by Reuters.

At the same meeting, the managing director of PSO said a gasoline cargo due for loading on Jan 13 has already been cancelled due to the non-opening of LCs. “He added that the country is having limited stocks and such a situation can lead to dry out,” according to the letter.

Previously, the Oil Companies Advisory Council (OCAC), representing refining, pipeline, and marketing companies, also flagged that delays in the opening of LCs could “lead to a fuel shortage in the country”.

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In a Jan 13 letter to the Ministry of Finance, OCAC said Pakistan needs to import around 430,000 tonnes of gasoline, 200,000 tonnes of diesel, and 650,000 tonnes of crude oil every month, costing $1.3 billion to meet local demand.

“If LCs are not established on a timely basis, critical imports of petroleum products would be impacted which may lead to a fuel shortage in the country,” the OCAC said.

Pakistan bought only 223,000 tonnes of gasoline in December versus 608,000 tonnes in the same period a year earlier, data from Kpler showed. In January this year, the country was projected to import 270,000 tonnes of the fuel, compared with 393,000 tonnes in the same month in 2022, the data showed.

Some banks have denied delays in issues of LCs, while SBP did not respond to a Reuters email seeking comment.

“If there are no issues with LCs in Pakistan then why have the SBP and sector been holding meetings all of last week?” a senior official from one of the oil companies said.

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PSO said last week it was ensuring a seamless supply of gasoline and oil across the country and had ample stocks.

It also said its import cargoes were arriving smoothly as planned.

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NDMA alerts for intense rainfall, thunderstorms from April 17

NDMA alerts for intense rainfall, thunderstorms from April 17

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NDMA alerts for intense rainfall, thunderstorms from April 17

The National Disaster Management Authority (NDMA) as per the latest projections from the National Emergency Operations Centre (NEOC) and multiple weather models, in its advisory has highlighted a series of moderate to intense weather systems to cause rainfall and thunderstorms in the country from April 17th to 29th.

“These weather patterns are anticipated to bring heavy rain, thunderstorms, and hailstorms, posing significant risks to various parts across the country,” said the NDMA news release issued on Wednesday.

The forecast indicated that a weather system would enter Pakistan on April 17th, initiating a period of heavy rainfall and thunderstorms lasting until April 22nd.

“The system will influence Balochistan from April 17th to April 19th, followed by impacts on Punjab and Sindh from April 18th to April 19th. Upper Punjab will experience the effects from April 18th to April 21st, while Khyber Pakhtunkhwa (KP), Gilgit-Baltistan (GB), and Azad Jammu and Kashmir (AJK) will be affected from April 17th to 22nd April,” the advisory said.

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Following this, a weaker weather system was expected to enter Pakistan on April 23rd, bringing low rainfall and thunderstorms to certain parts of the country until April 24th.

While Balochistan and upper Punjab would experience slight impacts from April 23rd to April 24th, KP, GB, and AJK would also be affected.

However, Sindh was not expected to be impacted during this period.

Subsequently, a strong weather system is forecasted to enter Pakistan on April 25th, bringing heavy rain, thunderstorms, and hailstorms with occasional gaps until April 29th. This system will affect Balochistan from April 25th to April 29th, with intermittent gaps. Sindh will experience impacts on April 25th, 26th, and 28th, while South Punjab will be affected from April 27th to April 28th. Upper Punjab will face the brunt from April 26th to April 29th, while KP will experience effects from 25th to 29th April, potentially impacting GB and AJK from April 25th to April 29th.

The expected rainfall may trigger flash floods in local nullahs of vulnerable areas, including Khuzdar, Ziarat, Zhob, Sherani, Muslim Bagh, Quetta, Pishin, Kech, Panjgur, Gwadar, and Turbat. Flooding may also occur in low-lying areas during the forecast period, particularly in southern western Balochistan.

In the light of these projections, the National Disaster Management Authority (NDMA) has issue dinstructions for Provincial Disaster Management Authorities (PDMAs), District Disaster Management Authorities (DDMAs), and other relevant line departments to remain vigilant and prepared to respond to any emergent situations. It is imperative for departments to ensure the pre-placement of machinery and the availability of relevant staff in vulnerable areas.

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Local departments are urged to sensitize residents living along riverbanks and associated nullahs about the expected increase in water flows, and to facilitate timely evacuation of at-risk populations from low-lying and flood-prone areas as per evacuation plans. Additionally, citizens are advised to take extreme precautionary measures, such as staying away from electric poles and weak infrastructure, and refraining from driving or walking in waterways.

Farmers, cattle owners, tourists and travelers are also advised to remain cautious during this period, checking weather and road conditions before traveling, and taking necessary steps to protect crops, livestock, and personal safety.
For further updates and information, citizens are encouraged to stay tuned to local weather forecasts and advisories.

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President summons NA session on April 19

President summons NA session on April 19

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President summons NA session on April 19

President Asif Ali Zardari has summoned the session of the National Assembly on Friday, April 19, 2024 at 10:30 am.

The president summoned the session of National Assembly in exercise of the powers conferred by article 54(1) of the Constitution of the Islamic Republic of Pakistan.

In previous session, Aseefa Bhutto Zardari, daughter of former prime minister Benazir Bhutto and President Asif Ali Zardari, took oath as a member of the National Assembly.

National Assembly Speaker Sardar Ayaz Sadiq administered the oath to Aseefa.

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During the session, Bilawal Bhutto Zardari provided headphones to Aseefa Bhutto Zardari to reduce the noise disturbances as PTI MNAs raised slogans calling for the release of the PTI founder.

Following Aseefa Zardari’s swearing-in, PPP members also chanted slogans in support of the Bhutto family like ‘jiye Bhutto’.  

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President Zardari for strengthening economic, cultural ties with Turkiye

President Zardari for strengthening economic, cultural ties with Turkiye

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President Zardari for strengthening economic, cultural ties with Turkiye

President Asif Ali Zardari on Wednesday called for further enhancing bilateral cooperation with Turkiye in the areas of trade, economy, education and culture.

The president, talking to Ambassador of Turkiye in Pakistan Dr Mehmet Pacaci, who called on him, said that Turkish companies should benefit from the investment-friendly policies of the country and invest through the Pakistan Stock Exchange.

Welcoming the ambassador, the president said that the people of Pakistan and Turkiye had historic and long-standing ties, adding that the two nations had always supported and stood by each other in difficult times.

President Zardari stated that Pakistan could benefit from the Turkish development experience, especially in the area of infrastructure development.

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In order to promote regional connectivity, he suggested undertaking a joint feasibility study to establish a railway connection between the two brotherly countries. The president also underlined the need for increasing educational and cultural exchanges to further promote people-to-people contacts. He said that Pakistan looked forward to welcoming Turkish President Recep Tayyip Erdoğan to the 7th High-Level Strategic Cooperation Council session in Pakistan.

President Zardari also expressed his gratitude for President Erdoğan’s congratulatory messages on his election as President of Pakistan as well as at the beginning of Holy Ramazan. He also conveyed his warm greetings and sentiments for the future success of the Turkish president. 

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