Mr Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has called for the announcement of emergency measures to insulate Pakistan’s trade and industry and protect the country’s economy and its people from the debilitating and burgeoning conflict in the Middle East.
Mr Atif Ikram Sheikh warned that ongoing geopolitical volatility – particularly the disruptions in the Red Sea and the Strait of Hormuz – poses a severe threat to Pakistan’s fragile economic recovery, energy security and export competitiveness.
FPCCI Chief explained that Pakistan’s trade and industry cannot afford to be collateral damage in this regional conflict; with nearly 30% of global petroleum consumption passing through the Strait of Hormuz, any prolonged blockage or disruption will trigger massive supply chain shocks. We must proactively shield our economy; secure our energy lifelines and protect our exporters from skyrocketing logistics costs, he added.
Mr Atif Ikram Sheikh elaborated on the country’s vulnerability vis-à-vis Middle Eastern supply chains and highlighted several alarming data points that necessitate immediate government intervention. The country has a heavy reliance on Gulf energy as Pakistan imports over $5.7 billion in crude petroleum annually, primarily sourced from Saudi Arabia (approx. $3.2 billion) and the United Arab Emirates (approx. $2.3 billion) – and, when refined petroleum products are added, this amounts to $10.71 billion in FY25.
FPCCI President stressed that skyrocketing freight and insurance costs can pose a huge challenge due to the Red Sea crisis, as commercial shipping lines are being forced to reroute. This massive detour will add 15 to 20 days to transit times for Pakistani exports destined for our largest export markets, i.e., the EU, UK, and U.S.
Mr Atif Ikram Sheikh maintained that freight costs on key shipping routes – which may surge by up to 300% – and marine insurance premiums have spiked due to war-risk classifications. This threatens to severely inflate the cost of imported raw materials and erode the price competitiveness of Pakistani textiles and manufacturing exports, he added.
Mr Atif Ikram Sheikh has proposed that, to safeguard the national economy, the federal government shall immediately implement the protective measures and build petroleum reserves, and prepare a backup plan through finalising emergency agreements for backup oil supplies and deferred payment facilities with key allies like Saudi Arabia to ensure an uninterrupted flow of crude oil and diesel.
Mr Saquib Fayyaz Magoon, SVP FPCCI, stated that freight and insurance relief through the Ministry of Commerce and the State Bank of Pakistan (SBP) must be introduced, and a targeted relief package to subsidise exorbitant marine insurance premiums and freight hikes should be planned, which will cripple the country’s export earnings if it remains unaddressed.
SVP FPCCI emphasised that Pakistan needs to maximise indigenous refining and support domestic refineries to operate at their enhanced capacities. We need a localised strategy that protects our energy supplies and keeps our export engines running. The FPCCI stands ready to work with the government to navigate through this geopolitical storm, he added.
