Attacks on Gulf energy infrastructure 'worrying' for outlook, says Pakistan finance minister

Pakistan's finance minister cautioned on Saturday that attacks on energy infrastructure in Saudi Arabia and other Gulf nations pose a significant threat to the country's long-term economic outlook. In an interview ahead of the IMF-World Bank Annual Meetings in Bangkok, Muhammad Aurangzeb stated that Pakistan has managed to secure enough energy supplies through November, but is now preparing for the upcoming winter when household demand typically rises.

The minister said the immediate impact of the attacks has been well-managed, with no energy shortages, long gas station lines, or law and order issues. However, he expressed concern that unless the government faces an "absolute dire need," it will not procure additional liquefied natural gas (LNG) shipments, which are significantly more expensive than previously contracted deals.

The surge in global energy prices since the U.S.-led war on Iran began in February, due to Tehran's retaliatory actions against Western allies in the Gulf, has been attributed to the curtailment of oil and gas supplies. Aurangzeb warned that damage to energy facilities could delay economic recovery, and noted that the return to normalcy could be prolonged if such disruptions persist.

Pakistan has been a long-standing customer of the International Monetary Fund, currently in its 25th program with the organization, totaling around $7 billion over three years, with a recent $1.2 billion tranche released. The minister emphasized that Pakistan has been proactively pursuing fiscal consolidation, with growing tax revenues and efforts to reduce tax evasion.

However, he acknowledged resistance to reform efforts from industry, lobbying groups, and vested interests, particularly the privatization of state-owned assets controlled by the military.