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Karachi: Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (), has emphatically urged the federal government to declare an immediate energy emergency. He highlighted that escalating regional petroleum prices—already at an exorbitant PKR 55 per liter—and punitive interest rates, currently at 10.5%, are exacerbating Pakistan’s economic struggles.
These factors threaten to push up costs of doing business beyond sustainable levels and stymie industrial growth. Competing economies in the region enjoy more accommodating monetary policies and lower petroleum prices. In contrast, Pakistan’s manufacturers face crippling exorbitant borrowing costs, inhibiting investment and modernization efforts that further increase logistical, transportation, and captive power generation expenses.
This will severely erode profit margins for Pakistani businesses reliant on Gulf energy imports from Saudi Arabia, the United Arab Emirates (UAE), and Qatar. Intermittent interruptions in crude oil and liquefied natural gas (LNG) supplies could fuel inflationary pressures and deepen the country’s cost-of-living crisis.
The surge in freight and insurance costs due to war-risk classifications has also escalated marine insurance premiums, driving daily LNG freight rates up by more than 40%. These increased expenses are compounded by supply chain delays resulting from rerouting shipments away from Gulf routes. Transit times for Pakistani exports destined for key European Union (EU), UK, and U.S. markets could be extended by an additional 15 to 20 days.
Both Port Qasim and Karachi Ports are intricately linked to the region’s maritime shipping routes, leaving domestic supply chains highly vulnerable to disruptions and delays. Atif Ikram Sheikh stressed that while the current 28-day petroleum reserve serves as a temporary buffer, it is insufficient for prolonged regional conflicts. A coordinated response from policymakers, regulators, and the business community is imperative.
Saqib Fayyaz Magoon, ‘s Senior Vice President, called for urgent action to establish an effective framework for national strategic oil reserves. He argued that protection of export competitiveness requires targeted policy actions to absorb rising imported raw material costs and mitigate potential exchange-rate volatility impacts.
stands ready to collaborate with the government on formulating and implementing these contingency plans to safeguard Pakistan’s trade and industry during this period of unprecedented global uncertainty.