Pakistan Economy Faces $50 Billion in Losses per Year If Oil Hits $150/Barrel

Pakistan’s economy could suffer annual losses ranging from $10 billion to $50 billion if the ongoing Middle East war continues and global oil prices surge toward $150 per barrel, officials told the National Assembly Standing Committee on Finance on Thursday.

Lawmakers were informed that international oil prices have already crossed $123 per barrel amid uncertainty caused by the Middle East war, while petroleum product prices in Pakistan have increased by up to 42 percent in recent months.

It was revealed that Pakistan is currently facing an additional financial burden of around $70 million per day due to higher oil prices, which has already pushed the country’s import bill up by nearly $4 billion over the past two months.

At present conditions, the economy could face annual losses of $10 billion to $12 billion, but if the Gulf War continues, economic damage over the next three months alone may reach between $24 billion and $32 billion.

In a worst-case scenario where oil prices climb to $150 per barrel and the war is prolonged, annual losses could rise to as much as $50 billion, depending on the intensity and duration of the war.

The committee was told that higher global oil prices could weaken exports, slow remittance inflows, and accelerate inflation across the country. Transport fares have already increased between 40 percent and 100 percent, while rising fuel costs are pushing up business expenses.

The full economic impact of the crisis is likely to become visible in the next quarter and may disrupt Pakistan’s overall macroeconomic stability.

Energy supplies have also been affected, as disruptions in RLNG imports from Qatar and furnace oil shipments have increased the risk of electricity shortages, forcing load shedding in Islamabad and other parts of the country.

The National Assembly committee also expressed serious concern over Pakistan’s rising public debt. Finance Ministry officials told lawmakers that while the legal debt limit stands at 60 percent of GDP, Pakistan’s debt ratio has climbed to nearly 70 percent.