Karachi: Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has called for urgent measures to protect Pakistan's economy from the escalating conflict in the Middle East. He emphasized the potential threats to the country's economic recovery, energy security, and export competitiveness due to disruptions in key trade routes such as the Red Sea and the Strait of Hormuz.
According to Federation of Pakistan Chambers of Commerce and Industry, the ongoing geopolitical instability could severely impact Pakistan's trade and industry, with nearly 30% of global petroleum consumption passing through the Strait of Hormuz. Any extended blockage or disruption in these areas is likely to cause significant supply chain disruptions, escalating logistics costs, and threatening the nation's energy security.
Mr. Sheikh highlighted Pakistan's dependency on Gulf energy, noting that the country imports over $5.7 billion in crude petroleum annually, primarily from Saudi Arabia and the United Arab Emirates. When refined petroleum products are considered, this figure rises to $10.71 billion for the fiscal year 2025. He pointed out that the rerouting of commercial shipping lines due to the Red Sea crisis could add 15 to 20 days to transit times for Pakistani exports destined for major markets in the EU, UK, and the U.S., further inflating costs.
The FPCCI President warned of possible surges in freight costs on key shipping routes by up to 300%, alongside spikes in marine insurance premiums due to war-risk classifications. These increases threaten to raise the cost of imported raw materials and diminish the price competitiveness of Pakistani textiles and manufacturing exports.
To mitigate these risks, Mr. Sheikh proposed that the federal government implement protective measures, build petroleum reserves, and finalize contingency agreements with allies like Saudi Arabia for backup oil supplies and deferred payment facilities. This would help ensure an uninterrupted flow of crude oil and diesel.
Mr. Saquib Fayyaz Magoon, Senior Vice President of FPCCI, recommended that freight and insurance relief be introduced through the Ministry of Commerce and the State Bank of Pakistan. He also suggested a targeted relief package to address the steep marine insurance premiums and freight hikes, which could cripple the country's export earnings if left unaddressed. Mr. Magoon stressed the need for maximizing indigenous refining capabilities and supporting domestic refineries to operate at enhanced capacities. He affirmed the FPCCI's readiness to collaborate with the government to navigate the challenges posed by the geopolitical uncertainties.
The post FPCCI Urges Immediate Measures to Shield Pakistan’s Economy from Middle East Conflict appeared first on Pakistan Business News.