ISLAMABAD – Finance Minister Muhammad Aurangzeb on Tuesday said the ongoing conflict sparked by the US-Israeli war on Iran has not adversely impacted Pakistan’s remittances from the Middle East. “Some members spoke of remittances, which is true. [However,] thankfully, there has been no impact on remittances as of yet,” Aurangzeb said while speaking on the National Assembly floor.
“However, the reality is, roughly between 40 to 50 per cent of our remittances are coming from the GCC (Gulf Cooperation Council) countries,” the minister said, pointing out the region’s large contribution. “So we are also reviewing its elasticity, that what difference it can make on the balance of payments and the current account,” he added.
Monitoring Economic Impacts
Noting that other lawmakers had “rightfully” wondered what impacts the conflict would have on Pakistan’s economy, Aurangzeb said the government was regularly monitoring several aspects. “Not only is the oil and gas bill increasing, but trade and insurance cost has gone up and the vessels available that bring these molecules,” he added.
Commenting on Pakistan’s diplomatic efforts to secure peace in the Middle East, Aurangzeb said, “Pakistan is playing its role, with prime minister sahib, field marshal sahib, deputy prime minister sahib. May God make us take things to the finishing line.”
However, he cautioned that even if hostilities cease soon, the resulting crisis would remain for “weeks and months” as energy infrastructure has been hit and continues to be hit across the Gulf.
International Comparisons
During his speech, Aurangzeb detailed that government meetings are held on a daily basis, where steps taken by others in South Asia and even those in Southeast Asia are studied. “Rationing has begun in a lot of countries […] even people with deep pockets have already transmitted the price. If you compare internationally, in the UAE, petrol prices were increased by 30pc and diesel prices by 70pc,” he said.
The minister cited Bangladesh, Sri Lanka, India, Philippines and Cambodia as examples of nations hit hard by the ongoing crisis.
Blanket Subsidy and Targeted Relief
In an apparent response to remarks made by other lawmakers, Aurangzeb stressed the need to set some facts straight after “statements were made that had no connection with reality.” The minister highlighted that a blanket subsidy had been given, halting the transmission of oil price hikes to the public from March 14 to April 4.
“It is important to reinforce that a blanket subsidy of Rs129 billion was given,” he asserted, pointing out that funds were sourced through austerity measures, which were also facing a third-party audit. The budget for Public Sector Development Programme (PSDP) was cut by Rs100bn, Aurangzeb noted, adding that dividends and profits were obtained from state-owned enterprises (SOEs).
“On the question of whether the deserving segments were taken care of or not, so a targeted subsidy was announced right at that time,” he said, referring to the subsidies aimed at bikers, public transport and small-scale farmers. “We have not just announced the subsidies; the disbursements are underway and the process had begun on Saturday,” Aurangzeb highlighted.
The minister noted that “very constructive suggestions” had come from the treasury and opposition benches. “While we should hope for the best, we have to plan for the worst and hope is not a strategy,” he remarked.
PPP’s Sharmila Faruqui Decries Fuel Price Hike
Speaking on the NA floor before Aurangzeb, PPP’s Sharmila Faruqui decried the recent hikes in petroleum prices. She said that the briefing given by Petroleum Minister Ali Pervaiz Malik before the NA on Monday on the increase in oil prices was not satisfactory and he was “unconvincing.”
Since the February 28 strikes by the US and Israel on Iran triggered the war and pushed up global oil prices, fuel prices in Pakistan have reached record highs. In two major hikes, petrol prices have risen from Rs266.17 to Rs378 — after a partial reduction in a recent hike — while those of high-speed diesel have surged from Rs280.86 to Rs520.35.
In her speech, Faruqui claimed Pakistan was the first country in the region to increase oil prices. The PPP leader referred to recent addresses by PM Shehbaz and the April 2 press conference by three ministers on the issue of oil prices, saying they showed a lack of consistency in the government’s policies and decisions.
Faruqui suggested that the government hire the services of some consultants in order to have consistent policies, highlighting that no one knew how long the economic crisis stemming from the Middle East conflict would last. She noted there was a tax of Rs131 per litre on petrol and questioned the government’s policy direction.
MQM-P Calls for Briefing on Regional Situation
Meanwhile, Javed Hanif of Muttahida Qaumi Movement-Pakistan (MQM-P) demanded that the NA should be given a comprehensive briefing on the possible fallout of the ongoing regional situation so that they can formulate future policies and decisions.
Taking part in the debate, Hanif demanded that Deputy PM and Foreign Minister Ishaq Dar, Defence Minister Khawaja Asif, Aurangzeb, and a team of security officials should brief the house on the Middle East conflict and its possible implications for Pakistan.
He appreciated Pakistan’s role and its mediatory efforts, saying that everyone was trusting Pakistan and its stature has increased. However, the MQM-P leader said, they should be ready for the situation if these efforts remained fruitless.
“What if the US acts on its threat?” Hanif asked in an apparent reference to the US president’s threats to wipe out Iran. He cautioned that if it happened, then the statehood in Iran would come to an end. He observed that if Iran retaliated, then the economic system of the Gulf countries would collapse, which could cause serious financial problems for Pakistan.
“What will happen with our remittances that are sent by some five million Pakistanis?” Hanif asked.
Achakzai Suggests Formation of ‘National Government’
Separately, National Assembly Opposition Leader Mahmood Khan Achakzai suggested the formation of a “national government” to build consensus among the country’s political parties. “We should agree on some democratic points at least — Parliament will be the source of power, supremacy of the Constitution, policies will originate from here,” he said.
Stating that the time had passed when they used to blame each other for mistakes, the opposition leader said, “We will have to move toward a national government.” “We will have to agree on some points. We will have to ask the establishment to give some space,” he said.
Pointing out a “most dangerous” concern, Achakzai noted that several key politicians, including President Asif Ali Zardari, Prime Minister Shehbaz Sharif and PML-N President Nawaz Sharif, were now of old age. He called for key politicians, including Zardari, Nawaz, Shehbaz and Imran Khan, to come to the table to discuss national issues.
The country, Achakzai said, could only move forward through “collective wisdom.”
A Nation Braces for Uncertainty
The National Assembly debate on the economic impacts of the Middle East conflict revealed a nation bracing for uncertainty. While remittances have so far remained stable, the finance minister’s acknowledgment that 40-50 per cent of remittances come from GCC countries underscores Pakistan’s vulnerability to any economic disruption in the Gulf.
The contrasting tones of the debate—Aurangzeb’s cautious optimism about remittances versus Faruqui’s sharp criticism of fuel price hikes and Hanif’s warnings about existential threats to Gulf economies—reflect the uncertainty about how the conflict will evolve.
Achakzai’s suggestion of a national government, coming from the opposition leader, signals a recognition that the challenges facing Pakistan transcend partisan politics. Whether his call for key political leaders, including the detained Imran Khan, to come to the table will be heeded remains to be seen.
As the war continues and diplomatic efforts to secure a ceasefire remain uncertain, Pakistan’s economic resilience will be tested. The government’s daily monitoring of the situation and its contingency planning, as described by Aurangzeb, suggest that officials are preparing for multiple scenarios.
For now, remittances continue to flow. But as Hanif warned, the entire architecture of the region could change. Pakistan must be ready for whatever comes next.
