Govt to translate impact of rising global oil prices to consumers under existing fortnightly mechanism

ISLAMABAD: Amid disruption to LNG imports from Qatar, the government on Monday decided to keep translating the impact of rising global oil prices to consumers under the existing fortnightly pass-through mechanism to avoid a fiscal bulge amid close monitoring of supplies.

A meeting of the newly created 18-member cabinet committee, constituted by Prime Minister Shehbaz Sharif to monitor petroleum prices in the wake of the emerging situation in the region, was told that petrol and diesel stocks in the country were sufficient for almost a 30-day cover but Qatar Gas had closed its liquefied natural gas (LNG) facility after it came under Iranian attack.

Official communication from Doha about the latest situation was, however, still awaited. LNG supplies would nevertheless not be available beyond a few cargoes that had already crossed the Strait of Hormuz towards Karachi.

The 18-member cabinet body constituted by the prime minister included the ministers for petroleum and power; the State Bank of Pakistan governor; the secretaries of petroleum, power and finance; the chairman of the Oil and Gas Regulatory Authority; the managing director of Pakistan Refinery Limited; and representatives of Inter-Services Intelligence and the Intelligence Bureau, among others.

The meeting focused on the impact of the closure of the Strait of Hormuz and authorities concerned were directed to explore alternate supply routes.

It was reported that while there was no emergent situation, Saudi supplies of finished products could be routed through the Red Sea, while UAE imports through Fujairah were beyond the troubled route.

According to an official handout, the committee also undertook a comprehensive stocktaking exercise and deliberated on all matters within its mandate.

Members reviewed trends in forward and futures prices of petroleum products, assessed the resilience of regional and international supply chains amid the evolving geopolitical environment, examined potential short and medium-term foreign exchange implications of price volatility, and evaluated measures to prevent........

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