Pakistan is seeking financial assitance from Qatar, Saudi Arabia, and the UAE.
Pakistan reportedly asked Qatar for additional liquified natural gas (LNG) shipments as it grapples with a fuel shortage, Bloomberg reported on Tuesday.
Citing individuals privy to discussions between the two countries, the news agency said Pakistan requested the delivery of extra shipments every month, “as soon as this year”.
The sources noted talks are ongoing.
Last year, QatarEnergy, Qatar Petroleum at the time, inked a 10-year LNG deal with Pakistan State Oil Company. The deal was described as the “lowest publicly disclosed liquified gas contract in the world”, signed with the presence of former Prime Minister Imran Khan.
Under the agreement, Pakistan receives an average of two shipments of gas per month that is expected to be bumped up to four, three years later. Khan had said the contract will help save the country $300 million annually or nearly $3 billion throughout its duration.
With the ouster of Khan in April, Pakistan’s new Shehbaz Sharif’s administration is now dealing with a fuel shortage that has caused blackouts in parts of the country.
Meanwhile, Pakistan is also seeking financial assistance from Qatar, Saudi Arabia, and the UAE, Pakistan’s Finance Minister Miftah Ismail told Geo News.
“Saudi Arabia, hopefully, will reload [deposit money in Pakistan’s central bank] before December,” said Ismail.
The Pakistani official noted that Riyadh “may extend Pakistan’s limit to buy oil on credit” and the country is also receiving a $2.4 billion loan from China in two or three days.
In May, Qatar hosted negotiations between Pakistan and the International Monetary Fund (IMF) in an effort to stabilise its crippling economy.
According to Geo News, Islamabad is currently finalising a bailout package with the IMF. The $6 billion package was approved in 2019 after it was requested by Pakistan.
Islamabad received $3 billion out of the package, which Pakistani officials are seeking to extend until June 2023.
“If we did not make these decisions [with the IMF] it would have been difficult for Pakistan,” said Ismail.
Pakistan’s foreign reserves are as low as $10.3 billion, covering less than two months of imports, with a rising current account deficit. Inflation in Pakistan has also been on the rise as the currency collapses.
In a historic low, the Pakistani rupee fell to roughly 198.4 per dollar in May, which means that the currency has lost around a quarter of its value in the past year.
Pakistan’s finance division previously said some of the issues that have contributed to the country’s economic state are “beyond the control of the government.”
“These included exogenous factors like supply shocks, commodity super cycle and the Russia-Ukraine conflict due to which commodity prices further soared.
“These factors were putting pressure on the current account as well as foreign exchange reserves,” it added.