Pakistan Expresses Concern Over Gulf Energy Infrastructure Attacks Amid Regional Tensions

BANGKOK — Pakistan’s Finance Minister Muhammad Aurangzeb stated on Saturday that recent attacks on energy infrastructure in Saudi Arabia and other Gulf nations pose significant risks to the country’s long-term economic stability, despite Pakistan successfully managing the immediate effects of rising energy costs linked to ongoing regional conflict.

Speaking on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Aurangzeb confirmed that Pakistan has secured sufficient energy supplies to meet demand through November and is preparing for increased consumption during the winter months.

“The first-order impact has been negotiated well by Pakistan,” Aurangzeb said. “We’ve had no shortage, no queues at the gas stations, and no law and order situation, which at times we have seen in some of the countries.”

He noted that Pakistan would avoid purchasing expensive spot liquefied natural gas (LNG) cargoes unless facing an “absolute dire need,” emphasizing preference for more cost-effective contracted shipments.

Regional tensions have intensified since February, following military actions involving the United States, Israel, and Iran, which disrupted oil and gas supplies while drawing retaliatory strikes against U.S. allies in the Gulf. Concurrently, Yemen’s Houthis have escalated attacks on Saudi Arabia, targeting energy facilities and airports in recent days.

Aurangzeb expressed concern over the infrastructure damage, warning it could significantly delay economic recovery. “What is now the worrying part is when the energy infrastructure starts getting hit. I, to be very honest, I don’t know where that would go. But one thing is very clear: that if the infrastructure continues to get hit, the return to normalcy, even if things subside, will take longer.”

IMF RELATIONSHIP AND REFORM CHALLENGES

Pakistan remains reliant on International Monetary Fund (IMF) support, currently implementing its 25th program with the institution since independence in 1947. The current arrangement provides approximately $7 billion over three years, with a $1.2 billion disbursement approved earlier this month.

“Fortunately for us, we have been on this fiscal consolidation path for a while,” Aurangzeb said, acknowledging past economic vulnerabilities.

The government has focused on strengthening tax collection mechanisms, particularly addressing tax evasion by private sector entities that collected sales taxes without remitting them to state coffers. Aurangzeb estimated these practices had cost billions of dollars and emphasized ongoing efforts to improve income tax compliance.

“Every reform, everything that you try to do when you try to change the status quo, there is pushback,” he said, citing resistance from industry groups and vested interests.

A key component of the IMF program involves privatizing state-owned enterprises, a sector where Pakistan’s military operates extensive commercial interests across real estate, fertilizers, and other industries. When questioned about potential state funding for military-run businesses, Aurangzeb insisted these enterprises operate independently and profitably without government subsidies.

“As far as we are concerned, whichever commercial enterprises [the military] are running, they are running on a standalone basis and profitable on their own basis,” he said. “So, I can confirm to you, we are not providing any funds from the exchequer.”

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