Pakistan energy supplies are sufficient to meet the country’s needs until November, Finance Minister Muhammad Aurangzeb has said, while warning that attacks on energy infrastructure in Saudi Arabia and other Gulf countries could threaten Pakistan’s longer-term economic outlook.
Speaking to Agence France-Presse (AFP) on Saturday, October 17, on the sidelines of the International Monetary Fund (IMF) and World Bank Annual Meetings in Bangkok, Aurangzeb said Pakistan had so far managed the immediate effects of rising global energy prices linked to the US-Israeli war on Iran. However, he cautioned that prolonged disruptions to critical infrastructure could delay the return to economic normalcy.
The finance minister’s remarks highlight the challenges facing Pakistan as it seeks to maintain energy security, control economic pressures and continue reforms amid growing uncertainty in international markets.
Pakistan Energy Supplies Secured Until November
Aurangzeb said Pakistan had procured sufficient energy supplies to last through November and was now planning for the winter months, when household energy demand typically increases.
He said the country had managed the immediate impact of the global energy shock without the shortages, long queues at fuel stations and law and order problems experienced in some other countries.
“The first-order impact has been negotiated well by Pakistan,” the finance minister told AFP.
He added that the government would avoid purchasing liquefied natural gas (LNG) from the spot market unless there was an urgent need. Spot cargoes can cost considerably more than supplies secured through existing contracts, potentially increasing the country’s import bill.
The government’s approach reflects the importance of balancing reliable energy supplies with the cost of procurement, particularly when international prices remain volatile.
However, securing supplies through November does not eliminate the risks facing Pakistan in the following months. Winter demand, international prices and disruptions to shipping or production could influence future procurement costs and availability.
Gulf Infrastructure Attacks Raise Economic Concerns
Aurangzeb expressed particular concern over attacks on energy facilities and other critical infrastructure in Saudi Arabia and neighbouring Gulf countries.
He warned that damage to these facilities could have consequences extending beyond the immediate conflict, even if hostilities eventually ease.
“What is now [the] worrying part of it is when the energy infrastructure starts getting hit,” he said.
The finance minister added that continued damage to critical infrastructure could prolong the recovery period and delay a return to normal economic conditions.
The concern is significant for Pakistan because the country relies heavily on imported energy to meet domestic requirements. Disruptions affecting production, shipping routes or export facilities can increase procurement costs and create uncertainty over future supplies.
Higher international oil and gas prices can also put pressure on foreign exchange reserves, the current account and domestic inflation. Depending on the duration and scale of disruptions, consumers and businesses could face higher fuel, transport and production costs.
Read more: Iran Urges UN Security Council to Act Against Israel Over Regional Tensions
Pakistan Avoids Expensive LNG Spot Purchases
Pakistan’s decision to limit purchases of expensive LNG spot cargoes is another important element of its energy strategy.
Existing supply contracts can provide greater predictability in procurement, while spot purchases expose buyers to prevailing market prices. During a global energy crisis, the difference can significantly affect the cost of imports.
Aurangzeb said the government would make additional spot purchases only if circumstances created an urgent requirement.
The approach could help limit additional costs, but future energy security will depend on the availability of contracted supplies, domestic demand and conditions in international markets.
Winter preparations are particularly important because higher household demand can place additional pressure on gas supplies and electricity generation.
Aurangzeb Defends Pakistan’s Fiscal Reforms
Beyond energy security, Aurangzeb said Pakistan’s ongoing fiscal consolidation had helped prepare the economy to withstand external shocks.
Pakistan remains engaged with the IMF under a $7 billion Extended Fund Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility (RSF).
Earlier in October, the IMF reached a staff-level agreement with Pakistan on the fourth review under the EFF and the third review under the RSF. The agreement could unlock approximately $1.2 billion, subject to approval by the IMF Executive Board.
Aurangzeb said Pakistan had been pursuing fiscal consolidation for some time, placing the country in a better position to manage international economic pressures.
He also highlighted efforts to improve tax collection, including action against businesses that collect sales tax from consumers but fail to transfer the money to government accounts.
According to the minister, such practices account for substantial revenue losses, while income tax collection also offers room for improvement.
He acknowledged that reforms had encountered resistance from businesses, lobbying groups and vested interests seeking to preserve existing arrangements.
“Every reform, everything that you try to do when you try to change the status quo, there is pushback,” he said.
IMF Programme and Pakistan’s Economic Outlook
Pakistan’s economic recovery remains closely linked to its ability to strengthen public finances, improve revenue collection and manage external financing requirements.
The IMF programme supports the government’s efforts to stabilise the economy and implement structural reforms. However, rising energy prices and prolonged regional instability could complicate these efforts by increasing import costs and adding pressure to inflation and the external account.
The latest concerns over Gulf infrastructure also underline the limits of domestic economic measures when global supply disruptions drive prices higher.
Pakistan’s ability to maintain adequate energy supplies, manage procurement costs and sustain fiscal reforms will therefore remain important in the coming months.
Aurangzeb’s assessment offers some reassurance about immediate energy availability, but his warning highlights the uncertainty surrounding the longer-term outlook. If attacks on critical infrastructure continue, Pakistan could face higher energy costs and renewed economic pressure even if regional hostilities begin to subside.
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