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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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Pakistan mourns President Raisi’s death; PM, president express sorrow

Pakistan mourns President Raisi’s death; PM, president express sorrow

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Pakistan mourns President Raisi's death; PM, president express sorrow

 Pakistan is observing a day of mourning today to express solidarity with the people of Iran following the shocking news of the death of Iranian President Ebrahim Raisi in a helicopter crash in the country’s northwest.

“Pakistan will observe a day of mourning, and the flag will fly at half-mast as a mark of respect for President Raisi and his companions and in solidarity with Brotherly Iran,” Prime Minister Shehbaz Sharif wrote in a post on social media platform X, expressing shock over the demise.

“Had been anxiously following developments regarding the reported crash landing of President Raisi’s helicopter. Was hoping for good news. Alas, this was not to be,” PM Shehbaz remarked as he extended deepest condolences and sympathies to the Iranian people on behalf of the government and people of Pakistan.

Shehbaz prayed that may Allah grant the martyrs a high place in Jannat al-Firdous and give patience to their families and the Iranian nation for this tragedy.

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“Pakistan had the pleasure of hosting President Raisi and Foreign Minister Hossein Amir Abdollahian on a historic visit less than a month ago. They were good friends of Pakistan,” the premier added in his post.

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Turkish FM meets COAS Munir, lauds army’s role for regional peace, stability

Turkish FM meets COAS Munir, lauds army’s role for regional peace, stability

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Turkish FM meets COAS Munir, lauds army's role for regional peace, stability

 Turkish Foreign Minister Hakan Fidan called on Chief of Army Staff (COAS) General Asim Munir here on Monday.

According to the military’s media wing, the army chief and the Turkish minister discussed matters of mutual interest during the meeting.

The Turkish minister appreciated the role of the Pakistan Army in maintaining peace and stability in the region, the ISPR said in a statement.

The two leaders expressed their satisfaction at the deep bilateral relations based on historical, cultural and religious ties between the two countries.

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Foreign Minister of Turkiye Hakan Fidan arrived in Pakistan for a two-day official visit on Sunday.

According to the Foreign Office, Additional Foreign Secretary Ahmed Naseem Warraich received the foreign dignitary at the airport.

The Turkish minister will also hold a meeting with Prime Minister Shehbaz Sharif, a spokesperson for the Foreign Office said.

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LHC gives Punjab government ultimatum for judges’ appointment

LHC gives Punjab government ultimatum for judges’ appointment

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LHC gives Punjab government ultimatum for judges' appointment

The Lahore High Court (LHC) has issued an ultimatum to the Punjab government regarding the appointment of judges.

Chief Justice Shehzad Ahmed Khan presided over a hearing on the Punjab government’s petition to transfer cases from LHC’s anti-terrorism court 1 Rawalpindi to another court.

During the proceedings, the advocate general Punjab informed the court that a government committee had consulted with Punjab Chief Minister on the matter of judges’ appointment, assuring that it had been prioritized for the upcoming cabinet session.

However, Chief Justice Khan inquired about the timeline for the next cabinet session, expressing dissatisfaction with the absence of immediate action.

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The Chief Justice ruled that either a special cabinet meeting should have been called or the government committee should have appeared before the court after completing its task.

In response, the advocate general assured that the matter would be resolved in the cabinet session scheduled for Friday.

Expressing dismay over the absence of the government committee in court, Chief Justice Khan deemed it disrespectful.

The advocate general promptly promised the committee’s presence within half an hour upon receiving the court’s call order.

Consequently, the court directed the Punjab CM and the cabinet to issue a notification regarding judges’ appointment before the next hearing.

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The court also warned that if the notification was not issued by then, the Punjab Chief Minister would be required to appear in the next hearing.

Addressing any potential concerns, the advocate general clarified that the government had no objections to the names recommended by the court for judges’ appointment.

Consequently, the case hearing has been adjourned until May 24.

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