Pakistan's oil industry on verge of 'collapse'

February 04, 2023 00:42

Representative image only

The oil companies of Pakistan are on the verge of 'collapse' due to a reeling economic crisis and devaluation of the currency, Geo News reported.

The Oil Companies Advisory Council (OCAC) in a letter to the Oil and Gas Regulatory Authority (OGRA) and Energy Ministry, wrote about the 'depreciation' of the local rupee which has affected a lot of businesses in the South Asian country, drastically.

"It has led to a loss worth billions of rupees to the industry as their letters of credit (LCs) are expected to be settled on the new rates, "whereas the related product has already been sold," Geo News reported.

The government has also limited LCs due to depleting foreign exchange reserves, which dipped to $3,086.2 million on January 27 and are only enough for 18.5 days.

According to Geo News, in the letter, OGRA has embraced the practice of not completely passing on the impact of rupee devaluation, instead imposing a massive burden on the sector.

Pakistan is experiencing a balance of payments problem, and the falling value of the rupee is raising the cost of imported commodities.

Energy accounts for a sizable portion of Pakistan's import bill.

Pakistan normally satisfies more than a third of its yearly power demand with imported natural gas, the price of which has risen since Russia's invasion of Ukraine.

Moreover, amid persistent inflationary pressures, goods remain out of people's range, whose purchasing power has already hit rock bottom.

The World Bank in earlier weeks of January slashed Pakistan's economic growth by half -- from 4 per cent to 2 per cent for the current fiscal year, saying that Islamabad faces mounting economic difficulties, reported The News International. -- ANI

« Back to LIVE

TOP STORIES

'Aaj batting tera Jassi bhai karega'

Jasprit Bumrah was seen practicing some shots in the nets ahead of MI's clash against DC.

What's Nirmalaji Queueing For?

Celebs and commoners cast their votes in the second phase of the Lok Sabha election on Friday, April 26, 2024

Is Salman Planning To Move Out Of Mumbai?

'With his safety in the city being jeopardised, Bhai is looking at moving to his farmhouse in Panvel permanently.'

Arms, ammunition found in CBI raid in Bengal's Sandeshkhali

The CBI during its probe got inputs of a large cache of arms hidden in Sandeshkhali. On Friday morning, a CBI team started a search operation during which the arms, including foreign-made pistols, were seized, the officials said.

Kotak Mahindra Bank's loan, deposit growth may be impacted after RBI curbs

Kotak Mahindra Bank's loan and deposit growth are likely to be affected after the Reserve Bank of India (RBI) asked the private-sector lender not to take on board new customers through the bank's online and mobile banking channels and...