Pakistan may soon join Sri Lanka in default as petrol shortage adds to economic crash

Islamabad: Economic situation in Pakistan is gradually becoming akin to that of Sri Lanka with the country speeding towards an oil crisis. Islamabad is facing acute shortage of foreign currency that has made difficult for businesses to thrive. Serpentine queues at petrol pumps in Khyber Pakhtunkhwa  According to a report by Dawn, long queues of cars and two-wheelers were seen in most parts of Khyber Pakhtunkhwa after a reduction in supplies by oil marketing companies. The report quoted drivers saying that most of petrol pumps in Peshawar were closed, while long lines of vehicles were a common sight at the filling stations run by the Pakistan State Oil and Shell. Petrol shortage in Pakistan Oil stocks in most petrol pumps in Pakistan are on verge of exhaustion. The Dawn report quoted a manager of a petrol station in Peshawar saying, “There is no electric supply due to a major power breakdown, so we cannot take the risk of being robbed in the darkness by continuing selling oil.” Motorists have claimed that they have to wait for an hour at petrol pump and many found out that after reaching near the filling machine, oil supply have exhausted at the station. Demand for petrol has also risen after the Khyber Pakhtunkhwa CNG administration on December 31 closed all CNG stations in the provincial capital for a month to ensure the supply of natural gas to domestic consumers. Pakistan gas crisis to worsen Gas prices in Pakistan is expected to worsen in February as a Liquefied Natural Gas (LNG) trading company - ENI - has backed out from of the LNG cargo which was scheduled to reach the country around February 7, a report by the News International quoted a senior official of the Energy Ministry as saying. Pakistan economic crisis As on January 13, Pakistan’s foreign reserves stood at USD 4.6 billion. The International Monetary Fund (IMF) estimates the country’s total external debt to be around USD 138 billion by the end of the current fiscal year in June, with about USD 21 billion worth of repayments due this year. The overall situation has risen fears that Pakistan could possibly join its South Asian neighbour Sri Lanka in default. Don’t Miss: Imran Khan fears 'Sri Lanka-type situation' in Pakistan For the unversed, a lack of foreign reserves in Sri Lanka triggered massive shortages of essential goods and eventually led to a default in May last year. No dollars with buyers According to Pakistan’s central bank, shipping containers full of goods are piling up at port in the country as buyers are not being able to secure the dollars to pay for imports. As per reports, associations for airlines and foreign companies have warned that they have been blocked from repatriating dollars by capital controls imposed to protect exhausting foreign reserves. Pakistan power outage On Monday (23 January), Pakistan witnessed a nationwide power outage that lasted for about 16 hours. The government said the blackout was caused by a technical glitch in the transmission system. However, a government official who spoke on condition of anonymity, drew an indirect connection of the power outage to dwindling fuel supplies. “The government turns off the power plants at night to save fuel. When they tried to resume them on Monday morning, the system tripped, and it created a crisis-like situation,” a report by Nikkei Asia quoted the government official as saying. Blame game The economic crisis in Pakistan comes at the time when the country gears up for elections that are scheduled to take place this year - sometime in August. The main challenger for Pakistan’s prime minister Shehbaz Sharif is his predecessor and Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan who was ousted last year but remains highly popular. Both Sharif and Khan have been blaming each other for the economic predicament with the former premier making all efforts to force early polls. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.