FPCCI warns Hormuz disruption risk could hit fuel supplies, costs; urges energy emergency

The Federation of Pakistan Chambers of Commerce and Industry has warned that rising tensions in the Gulf and the risk of disruptions around the Strait of Hormuz pose a threat to Pakistan’s economy.

In a statement, the chairman of FPCCI, Saquib Fayyaz Magoon, urged the government to declare an energy emergency and prepare alternative supply routes. He said global energy supply chains have become unstable and warned that energy-importing countries such as Pakistan would feel the impact through prices and supply.

He said the Strait of Hormuz carries around one-fifth of global oil shipments and any disruption could affect global markets. He said Pakistan relies on imports from Saudi Arabia, the United Arab Emirates and Qatar, and that even short disruptions in crude oil or LNG supplies could raise fuel and electricity costs and add to inflation pressures.

Magoon said Port Qasim and Karachi Port are linked to Gulf shipping routes, making Pakistan vulnerable to disruption in sea lanes through higher freight costs and delayed shipments. He also said tanker movements have already been affected, and claimed LNG freight rates have risen by more than 40%, with higher rates also reported in the Pacific basin.

He called for emergency planning for alternative energy routes, steps to build strategic petroleum reserves and diplomatic engagement aimed at easing regional tensions. 

He said policy action would be needed to limit the impact on industry and consumers from higher import costs, exchange-rate volatility and potential energy supply disruptions.