Page 5 - AsianOil Week 31 2022

AsianOil COMMENTARY AsianOil

reported to have restricted access to financ- shut owing to shortages of fuel required to run
ing for Pakistan’s energy imports, others have it.
started charging higher rates as a risk premium, Meanwhile, the government of Bangladesh
making it more challenging still for the coun- is reported to have ordered an operational halt
try to access the finances needed for energy at diesel-fuelled power plants. The country has
imports. Meanwhile, the rupee recently saw its been imposing power cuts in a bid to make its
worst weekly decline since 1998. diesel and natural gas stockpiles last longer,
Elsewhere in the region, India, which is a thereby reducing a need for costly fuel imports.
major supplier to Sri Lanka, has begun seek- Bangladesh has also sought IMF assistance,
ing up-front payments for the oil it sends to the but officials in Dhaka have noted that this is Fuel traders have
island country. This has raised concerns over Sri pre-emptive and insisted that it should not to
Lanka’s ability to pay off its debts. be equated with the bailout funds sought by Sri been reported as
Lanka and Pakistan. saying they are
What next? And in Sri Lanka, the government has said it
South Asian countries are working to find ways would launch a national programme to ration hesitant to sell
out of the crisis, but the situation does not look and distribute fuels. The country has also yet
promising. However, Pakistan reached a pre- to meet the conditions for further aid from the refined products
liminary deal with the International Monetary IMF, and it is also dealing with the collapse of
Fund (IMF) in mid-July to revive a $6bn bail-out its previous government last month amid pro- such as gasoline
package. This has been welcomed as a step in the tests over government mismanagement and fuel and fuel oil to
right direction, but media have reported the gov- shortages.
ernment as saying the budgetary commitment There have been hopes that India would be Pakistan.
with the IMF cannot be met without additional able to provide some stability for the region, but
taxation. As a result, the government decided to it has also struggled with a weakened currency
impose PKR30 billion ($134mn) worth of new that has made it more difficult to pay for energy
taxes as it works to meet the conditions of the imports.
IMF bail-out. It has also scaled back subsidies on While South Asian countries are trying to do
fuel, natural gas and electricity as part of these what they can to ease the pressure, there is no
efforts. end to the crisis in sight. As a result, analysts are
In the meantime, almost a quarter of Paki- expecting rationing and fuel supply shortages to
stan’s power generation is reported to have been continue affecting the region for some time.™

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