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 supply disruptions while ensuring uninterrupted domestic availability of petroleum products.

The possible fiscal impact of a prolonged conflict was also considered, but there was a lack of visibility due to uncertainties.

A detailed assessment of global oil market conditions was presented, including movements in international benchmarks, freight and insurance costs, shipping route dynamics, and alternative sourcing options.

Various supply and pricing scenarios were evaluated to ensure preparedness under different contingencies. It was, however, noted that these costs would become clear once the London market started business and would show the latest trends which could be discussed later this week as the committee would be meeting regularly.

The committee was informed that national stocks of petroleum products were presently at comfortable levels.

According to the handout, the finance minister was quoted as saying that there was no immediate supply stress and that maintaining market confidence and orderly conditions remained essential.

While acknowledging that the international environment was fluid and evolving, he noted that Pakistan’s energy supply chain remained stable and fully functional.

The committee also noted that closure of the Strait of Hormuz and tensions around the Bab-el-Mandeb Strait were major challenges for global energy security. “If the situation persists, then it may have implications for Pakistan’s energy supply chain,” the handout said.

It further quoted Aurangzeb as saying that the committee would operate as a strategic governance forum to continuously monitor developments and undertake structured scenario planning.

“He underscored that ensuring the availability of energy supplies across the country was the government’s primary objective and would remain the central driver of all decisions,” the statement said.

He directed all relevant entities to intensify coordination, validate physical stock positions, closely track shipments and storage, and remain fully prepared to respond to emerging developments.

He further emphasised that any decisions taken by the committee would be implemented with clarity and transparency.

“Pricing implications arising from international market movements, where unavoidable, will be addressed through established mechanisms in a predictable and orderly manner to avoid distortions or abrupt adjustments,” the statement said.

The meeting also reviewed LNG and liquefied petroleum gas (LPG) supply positions, shipment schedules, terminal operations, and line-pack considerations.

According to the statement, the relevant ministries were tasked with refining comparative scenario assessments, including economic and fiscal trade-offs associated with alternative fuel utilisation and demand management options.

To ensure continuous oversight and institutional readiness, it was decided that the committee would convene daily, with structured data consolidation followed by formal review, it added.

“This mechanism will enable real-time monitoring of international price movements, domestic stock levels, foreign exchange exposure, and supply chain developments,” the statement said.

Concluding the meeting, Aurangzeb reaffirmed that the government was closely monitoring the situation at the highest level and that proactive measures were firmly in place. He assured the public and market participants that there was no cause for concern.

“Energy supplies remain stable, governance mechanisms are fully operational, and comprehensive contingency planning is actively underway to safeguard national interests,” he was quoted as saying.

The cabinet committee is required to determine the foreign exchange implications of oil price volatility for the short and medium term and suggest measures to ensure uninterrupted supplies of oil products and markets stay adequately supplied.

It is also tasked with carrying out a detailed analysis of the fiscal impact in the event of a prolonged conflict and reviewing the broader effects of the war on Pakistan’s economy. It will submit its regular reports to the prime minister.

A high-level committee formed to monitor petrol prices in the aftermath of heightened tensions in the Middle East was informed on Monday that national stocks of petroleum products were currently at “comfortable levels”.

In a post on X, the finance ministry said the committee was formed a day earlier by Prime Minister Shehbaz Sharif. It said that the committee met on Monday under the chairmanship of Finance Minister Muhammad Aurganzeb.

During the meeting, the committee “undertook a comprehensive stocktaking exercise and deliberated on all matters within its mandate”.

As per the finance ministry statement, the 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.

They also evaluated measures to “prevent supply disruptions while ensuring uninterrupted domestic availability of petroleum products”. During the meeting, the fiscal impact resulting from a prolonged conflict also came under discussion, the ministry said.

“A detailed assessment of global oil market conditions was presented, including movements in international benchmarks, freight and insurance costs, shipping route dynamics, and alternate sourcing options,” the ministry said.

Additionally, supply and pricing scenarios came under discussion as well, “to ensure preparedness under different contingencies”. The committee was told that the national stocks of petroleum products were currently at “comfortable levels”, it added.

Meanwhile, the finance minister stressed that there was no “immediate supply stress”. He held that “maintaining market confidence and orderly conditions remains essential,” the ministry quoted him as saying.

The finance minister also stated that Pakistan’s energy supply chain remained “stable and fully functional”.

“The committee noted that closure of the Strait of Hormuz and tensions around strait of Babb Al-Mandeb are major challenges for global energy security,” the ministry said.

The committee cautioned that if the situation were to continue, “it may have implications for Pakistan’s energy supply chain”.

According to the ministry, the finance minister also said the committee was to “operate as a strategic governance forum to continuously monitor developments and undertake structured scenario planning”.

“He underscored that ensuring the availability of energy supplies across the country is the government’s primary objective and will remain the central driver of all decisions,” it said.

“He directed all relevant entities to intensify coordination, validate physical stock positions, closely track shipments and storage, and remain fully prepared to respond to emerging developments,” it further added.

The finance minister also said that “any decisions taken by the committee will be implemented with clarity and transparency”.

He gave assurances that any pricing implications resulting from international market movements, “where unavoidable, will be addressed through established mechanisms in a predictable and orderly manner to avoid distortions or abrupt adjustments”.

During the meeting, liquefied natural gas and liquefied petroleum gas supply positions, shipment schedules, terminal operations, and line pack considerations were reviewed as well.

“Relevant ministries were tasked with refining comparative scenario assessments, including economic and fiscal trade-offs associated with alternative fuel utilisation and demand management options,” the ministry said.

It was also decided that the committee will convene daily, with structured data consolidation followed by a formal review.

“This mechanism will enable real-time monitoring of international price movements, domestic stock levels, foreign exchange exposure, and supply chain developments,” the ministry said.

The finance minister assured the members that the government was “closely” monitoring the situation and had “proactive measures” in place.

According to the ministry, the finance minister also assured the public and market participants that there is no cause for concern.

“Energy supplies remain stable, governance mechanisms are fully operational, and comprehensive contingency planning is actively underway to safeguard national interests,” he was quoted as saying.

ISLAMABAD: The ongoing talks between an International Monetary Fund (IMF) staff mission and authorities in Islamabad had to be converted to virtual mode on Monday due to the regional situation following the attack on Iran by the United States and Israel.

The IMF mission, led by Iva Petrova, had to immediately relocate to Istanbul following an advisory issued by the money lending agency’s headquarters, disrupting a series of sectoral meetings planned for the day.

The remaining schedule of meetings, however, will remain intact and will progress through video link between Islamabad and Istanbul.

“An IMF mission led by Iva Petrova has started discussions with the authorities in Karachi and Islamabad on the third review of Pakistan’s Extended Fund Facility (EFF) arrangement and the second review of the Resilience and Sustainability Facility (RSF). Discussions will continue to be held virtually,” the Fund said in a statement.

Earlier in the day, the two sides had a kick-off meeting presided over by Finance Minister Muhammad Aurangzeb. The two sides broadly touched upon the emerging regional security situation but were equally uncertain about how the crisis would play out and for how long.

The two sides said they would closely monitor the evolving situation and discuss contingency measures as the engagements progressed.

The Fund’s mission began discussions with the State Bank of Pakistan and the business community in Karachi on February 25.

The formal kickoff meeting took place on Monday, which will be followed by further technical engagements with relevant ministries and entities until this weekend. Meetings will then progress to policy-level talks early next week, with a final wrap-up meeting with the finance minister planned for March 11.

The discussions on Monday revolved around third review of the $7bn Extended Financing Facility (EFF) and 2nd review of $1.1bn Resilience & Sustainability Facility (RSF). Finance Minister Aurangzeb said last week that Pakistan was well-positioned for a successful review of its loan programme.

The review talks, ending March 11, are of greater significance as both sides have to review the performance of the progammes for the half-year ending on December 31, 2025 as well as forward-looking preparations, including budget proposals based on performance this year, while also setting broad contours of the upcoming budget.

This would involve provincial reviews for now and the future, particularly those relating to provincial finances, including agriculture income tax and governance-related challenges and an action plan to address those weaknesses resulting in losses worth trillions of rupees.

In this regard, procurement and accountability agencies would be under added scrutiny, including their independence, institutional capacities, processes and performances.

The programme’s performance as of the end of December 2025 — the period under review — has mostly been up to the mark, albeit with a substantial revenue shortfall, which authorities believe could be reduced following a recent super tax decision by the Federal Constitutional Court in the government’s favour.

However, the overall tax-to-GDP ratio remains within limits. The two sides will also review all macroeconomic indicators for the third quarter still in progress.

The power sector would also remain under added scrutiny given volatile policy making in the recent months, including those relating to the industrial sector, residential fixed charges and so on, although circular debt numbers are within the target range.

On the positive side, Pakistan has met almost all quantitative performance criteria for the period under review. However, it is lagging behind in indicative targets and structural benchmarks, which could affect future programme implementation.

Given the biannual reviews of the $7bn EFF and the $1.1bn RSF, the two sides will have to agree on past performance as well as forward-looking implementation plans.

Upon the successful completion of the review, Pakistan will be eligible for the disbursement of about $1bn under the EFF and another $200m under the RSF by the end of April.

On the technical side, Pakistan will likely meet almost all seven quantitative performance indicators.

Net international reserves were likely to remain slightly lower than the $7bn benchmark for September 2025 and below $6bn for December 2025 against the $6.5 bn benchmark.

The central bank’s net domestic assets are estimated at around Rs12.5-13.5 trillion versus the ceiling target of Rs14.9-15.1tr for Sep and Dec 2025.