KARACHI/ISLAMABAD: Pakistan’s oil firms have issued a warning that the sector is “on the brink of collapse” as long as the dollar liquidity crisis continues and their costs of doing business skyrocket as a result of the devaluation of the rupee.
The government lifted the dollar limit in response to the International Monetary Fund’s (IMF) request, which caused the rupee to plunge to a record low of Rs276.58 in the interbank market.
The Oil Companies Advisory Council (OCAC) claimed in a letter to the Oil and Gas Regulatory Authority (OGRA) and Energy Ministry that the “sudden depreciation” of the local rupee has resulted in losses to the industry amounting to billions of rupees because their letters of credit (LCs) are anticipated to be settled at the new rates, “whereas the related product has already been sold.”
