Pak’s fuel supply under threat as foreign banks deny funding
Islamabad, May 31 (SocialNews.XYZ) In a context of increasing subsidy allocations, the Pakistani oil industry now faces challenges in arranging international finance for the import of crude and petroleum products.
Informed sources told Dawn News that the Petroleum Division informed the Prime Minister and Finance Minister that oil import deals were becoming increasingly difficult as foreign banks were not providing finance against letters. credit (LC) opened by petroleum marketing companies (OMC). and refineries with local banks.
A senior official told Dawn that with the exception of two major companies, Pakistan State Oil (PSO) and Pak-Arab Refinery Limited (Parco), all OMCs and refineries were struggling to arrange the import of petroleum products and raw.
The sources said approximately six to seven shipments worth $50-75 million each ($350-500 million cumulative) depending on size and product were currently on hold due to increased risk as a result of certain critical declarations of the ministries concerned on the budgetary and foreign difficulties. exchange post.
They said Pakistani banks open LCs on behalf of the oil industry, but their partner banks do not extend credit coverage, Dawn reported.
“Unfortunately, the country’s fuel supply is now also under serious threat from limited credit facilities, high inflation and a rising rupee-dollar parity,” said a petroleum industry report sent by the Petroleum Division to the bureau. of the Prime Minister and the Minister of Finance.
The oil industry told the government that this difficult financial situation had made the oil industry extremely vulnerable and fragile, adding that it “could lead to a breakdown in the supply chain”.