Finance Minister to Lead Daily Assessments Amid Regional Conflict
In a decisive move to shield its economy from external shocks, the Pakistani government has established a high-level committee to oversee the impact of volatile international oil prices. The 18-member body, constituted by Prime Minister Shehbaz Sharif, comes in direct response to a sharp surge in crude prices following US-Israeli military strikes on Iran, which have escalated tensions in the oil-rich Middle East.
Immediate Economic Threats and Committee Mandate
The notification from the Prime Minister’s Office, issued on Monday, outlines a grave economic landscape. Global oil markets reacted violently to the attacks, with Brent crude briefly spiking almost 14% and West Texas Intermediate jumping nearly 12%. The bombings, which resulted in significant casualties including Iran’s supreme leader, have also disrupted the vital Strait of Hormuz—a chokepoint for about 20% of the world’s seaborne oil—fanning fears of a prolonged supply crisis.
The newly formed committee, convened by Federal Minister for Finance and Revenue Muhammad Aurangzeb, is tasked with a multi-pronged strategy:
- Closely monitoring forward and futures prices of petroleum products.
- Assessing the predictability of Pakistan’s fuel supply chain.
- Determining the foreign-exchange implications of oil price volatility for the short and medium term.
- Ensuring an uninterrupted petroleum supply to keep domestic markets adequately stocked.
- Conducting a detailed analysis of the fiscal impact should the regional conflict prolong.
Broad Membership for Comprehensive Oversight
The committee’s composition reflects the cross-cutting nature of the crisis. Key members include the ministers for petroleum and power, the State Bank Governor, secretaries of key divisions, and the chairman of the Federal Board of Revenue. It also includes operational heads from critical entities like Pakistan State Oil, Pakistan LNG Limited, and gas utility companies SNGPL and SSGC-LPG. Notably, representatives from the Inter-Services Intelligence and the Intelligence Bureau are also part of the group, underscoring the security dimensions of energy supply.
Daily Reporting and Proactive Measures
The body has been instructed to meet daily and submit regular reports directly to the prime minister. It is empowered to co-opt additional members as needed to fulfil its mandate, with the Petroleum Division providing secretarial support. This structure aims to create a rapid-response mechanism to navigate price volatility, prevent fuel shortages, and mitigate broader economic fallout, including the stock market plunge of over 16,000 points witnessed on the same day.
The formation of this committee signals the government’s proactive approach to an external crisis that threatens to exacerbate Pakistan’s existing economic challenges, particularly its balance of payments and inflation management.
