Pakistani Oil Companies are on brink of collapse due to worsening economic crisis and devaluation of currency.The Oil Companies Advisory Council (OCAC) spoke about the “depreciation” of the local rupee, which has had a significant impact on several firms in the South Asian nation, in a letter to the Oil and Gas Regulatory Authority (OGRA) and Energy Ministry.
Oil Companies in Pakistan on brink of collapse
Due to diminishing foreign exchange reserves, which fell to USD 3,086.2 million on January 27 and are only sufficient for 18.5 days, the government has also restricted LCs.
Refineries in Pakistan shut down amid its Balance of Payment Crisis
Due to the non-availability of crude oil on Friday, Cnergyico Refinery suspended operations for a week. The declining value of the rupee is driving up the price of imported goods as Pakistan struggles with its balance of payments. A large chunk of Pakistan’s import bill is made up of energy.
As the crisis worsens, Pakistan’s Prime Minister Shehbaz Sharif declared that he would have to accept the IMF’s bailout requirements, which are “beyond conception.” For fear of reaction before the upcoming elections in October, the Government has refused to implement the tax increases and subsidy reductions that the IMF has required.
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