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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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4.3 magnitude earthquake jolts parts of Punjab

4.3 magnitude earthquake jolts parts of Punjab

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4.3 magnitude earthquake jolts parts of Punjab

An earthquake measuring 4.3 on the Richter scale struck various parts of Punjab including Lahore on Monday 

People came out of their homes in panic and started reciting verses from the Holy Quran. No loss of life and property was reported in any part of Punjab. 

According to the National Seismic Monitoring Centre, Islamabad, the epicentre of the earthquake was located five kilometres south of Sheikhupura at the depth of 45 kilometres.

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Pakistan Army shoots down Indian quadcopter on LoC

Pakistan Army shoots down Indian quadcopter on LoC

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Pakistan Army shoots down Indian quadcopter on LoC

Pakistan Army has shot down a spy quadcopter of Indian Army on the Line of Control (LoC).

According to a statement issued by the Public Relations Department of the Pakistan Army (ISPR), on Monday, an Indian Air Force quadcopter spying on Pakistan was shot down.

The ISPR said that the army has found the downed quadcopter inside Pakistani territory.

It may be recalled that it is the fifth anniversary of Operation Swift Retort today. On February 27, 2019, the Pakistan Air Force shot down Indian fighter planes that violated Pakistani airspace. 

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PTI founder, Bushra Bibi indicted in 190m pound case

PTI founder, Bushra Bibi indicted in 190m pound case

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PTI founder, Bushra Bibi indicted in 190m pound case

 An accountability court indicted the PTI founder and his wife Bushra Bibi in the ill-famous 190 million pound case – also previously known as Al-Qadir Trust case – as the judge, Nasir Javed Rana, held hearing at the Adiala jail.

All the cases involving the former PTI chairman are being heard at the jail premises – where he is imprisoned – because of the security threats, for which Bushra Bibi was shifted from her Bani Gala residence where she is serving her sentences in two cases – Toshakhana and illegal/un-Islamic marriage.

Meanwhile, her husband has so far been convicted in three cases – cipher, Toshakhana and illegal/un-Islamic marriage.

During the proceedings, the two accused pleaded not guilty, as the judge adjourned proceedings till March 6 while also summoning five witnesses to record their statements on next hearing.

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However, the accountability court accepted two pleas filed by the PTI founder, requesting permission for an appointment with his dentist and general physician.

Previously, the indictment had been postponed on several occasions due to the absence of Mohammad Bashir – the accountability court judge who is set to retire on March 14 and has applied for leave preparatory to retirement (LPR).

However, the law ministry last week appointed District and Sessions Judge Rana as an Accountability Court No 1 Islamabad judge to replace Bashir who went on leave on deputation for a period of three years. 

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