Pakistan may face Gulf conflict fallout for up to a year after ceasefire, finance minister warns

Finance Minister Muhammad Aurangzeb warned that the economic impact of the conflict in the Gulf region could continue affecting Pakistan for up to a year, even if an immediate ceasefire is reached.

Speaking during a Senate session, chaired by Chairman Syed Yousaf Raza Gilani, Aurangzeb said the government was using targeted subsidies to protect vulnerable groups despite limited fiscal space.

Responding to a calling attention notice, the minister said more than Rs5.4 billion had been provided to subsidise petrol for around 800,000 motorcycle users over three months.

Another Rs4.6 billion had been extended to farmers to offset higher fuel costs, he added.

Aurangzeb said the measures were intended to limit pressure on household budgets and prevent an increase in public transport fares.

He said the petroleum levy was linked to commitments made under Pakistan’s programme with the International Monetary Fund, while the government was trying to distribute the resulting burden through targeted relief.

The finance minister also reported an increase in Federal Board of Revenue receipts, saying collections were expected to reach Rs13.5 trillion by the end of the current fiscal year, compared with Rs7.5 trillion previously.