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Pakistan may dodge adverse impact of Gulf crisis

Pakistan may dodge adverse impact of Gulf crisis

KARACHI: The diplomatic crisis in the Gulf is not expected to impact Pakistan adversely in the immediate future, business leaders said, but advised the government to stay neutral to ensure steady trade ties and uninterrupted import of liquefied natural gas (LNG) from Qatar.

In a dramatic decision earlier this week, Saudi Arabia, the United Arab Emirates and other Gulf states broke off ties with Qatar.

Pakistan State Oil (PSO) confirmed that so far “no disruption in LNG supply has occurred”. A PSO official said the company was currently importing 3.75 million tonnes of LNG a year from Qatar. “Qatar continues supplies to all the countries including those in the Middle East,” he said. However, he said PSO could float tenders in the case of a shortfall.

With the expected commissioning of second terminal and additional supplies from diversified sources by Pakistan LNG Ltd in the fourth quarter of 2017, the supply risk would be mitigated, he said.

Zubair Tufail, the president of Federation of Commerce and Industry, said: “I do not see any serious repercussions on the two-way trade as Pakistan does not export any significant quantity of goods to Qatar. The overall trade volume between the two countries is not big.”

He said Pakistan exports small quantities of rice, textile goods and meat to Qatar, and hoped that the import of LNG from Qatar will continue by sea.

Qatar has a population of 2.3m, of which 325,000 are Qataris, 150,000 Pakistanis, 615,000 Indians, 260,000 Filipinos, 280,000 Bangladeshis, 200,000 Egyptians and 145,000 Sri Lankans.

According to Pakistan Bureau of Statistics, LNG imports jumped 129 per cent to cross $1 billion in July-April as compared to $439m a year ago.

Pakistan is importing LNG from Qatar under a multibillion-dollar, long-term deal signed last year to meet gas shortage and increase power generation. Under the agreement, Qatar will sell LNG worth $1bn each year to Pakistan.

Chairman of the Rice Exporters Association of Pakistan Mehmood Moulvi said trade between the two countries should continue, but advised the government to remain impartial in the Gulf crisis. Pakistan exports 30,000 to 40,000 tonnes of rice annually to Qatar, he said.

President of Karachi Chamber of Commerce and Industry Shamim Ahmed Firpo said there may be an impact on trade, but it would not be significant.

Published in Dawn, June 8th, 2017

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