Business Recorder
ISLAMABAD: Amid rising concerns over potential declines in remittances due to the escalating Middle East crisis, Finance Minister Muhammad Aurangzeb reassured the National Assembly on Tuesday that Pakistan’s remittances, particularly from the Gulf region, have so far remained stable despite the ongoing US-Israeli conflict with Iran. Speaking in the National Assembly, the minister also confirmed that Pakistan is scheduled to make a major Eurobond repayment of USD 1.4 billion, covering both principal and interest, in April 2026. Responding to lawmakers’ questions about a possible drop in remittances from GCC countries, he said there had been no impact so far. He noted that 40 to 50 percent of remittances come from the region and that the government was reviewing their elasticity to assess potential effects on the balance of payments and the current account. READ MORE: Middle East conflict may pose risks to projected remittance inflows On Pakistan’s diplomatic efforts to secure peace in the Middle East, the minister said the country was actively engaged alongside Prime Minister Shehbaz Sharif, Field Marshal Syed Asim Munir, and Deputy Prime Minister and Foreign Minister Ishaq Dar, expressing hope that these efforts would lead to a successful outcome. Aurangzeb cautioned, however, that even if hostilities end soon, the fallout could persist “for weeks and months” due to damage to energy infrastructure across the Gulf. He added that the government is meeting daily to monitor regional developments, noting sharp fuel price rises in the UAE and severe impacts in Bangladesh, Sri Lanka, India, the Philippines, and Cambodia. The minister emphasised the need to correct statements he said were “disconnected from reality,” highlighting that a blanket subsidy had shielded the public from oil price hikes between March 14 and April 4. “It is important to note that a blanket subsidy of Rs129 billion was provided,” he said, adding that the funds were sourced through austerity measures now undergoing a third-party audit. Aurangzeb also noted that the Public Sector Development Programme (PSDP) had been reduced by Rs100 billion, with dividends and profits obtained from state-owned enterprises. He said a targeted subsidy had been announced for bikers, public transport users, and small-scale farmers, with disbursements already underway since Saturday. On the privatisation front, the minister highlighted that 26 state institutions have been privatised, while the Public Works Department, PASSCO, and other departments have been closed. Plans are also in place to privatise Distribution Electric Companies. He reported that 8,000 megawatts of electricity are currently being generated from solar systems, with a committee formed to develop a clean energy policy through 2034-35. During discussions on petroleum prices, Aurangzeb welcomed constructive suggestions from both opposition and treasury and underscored the need for building strategic fuel reserves. Responding to a Calling Attention Notice moved by Naveed Qamar of the PPP and others, Defence Minister Khawaja Asif emphasised the need to transition to cheaper energy sources, including solar power, to reduce costs. He noted that Pakistan remains bound by power purchase agreements with independent power producers, some extending to 2029, 2030, and 2034. Minister of State for Climate Change Shezra Mansab Ali Khan said the government is promoting solar and clean energy through sustainable policies, aligning with global practices, maintaining investor confidence, and supporting consumers, while gradually shifting from imported coal to cleaner energy sources. Minister of State for Finance Bilal Azhar Kayani reported growth in tax revenue over the first eight months of the fiscal year and said the government is expanding the tax net while reducing the petroleum levy on diesel to zero to ease the impact of the US-Iran conflict and ensure steady fuel supply. Copyright Business Recorder, 2026
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