Pakistan, which is facing a severe gas shortage that has crippled its power sector and industries, will receive a liquefied natural gas cargo from Italy’s ENI SpA on Jan. 18 as scheduled, averting a potential supply disruption, government officials said on Dec 27. ENI, one of the long-term LNG suppliers to Pakistan, had earlier indicated that it might not be able to deliver the cargo. However, the company later confirmed that it would honor the contract as per the LNG term agreement. ENI signed a 15-year term agreement with state-owned PLL in May 2017 under which ENI was to provide an LNG cargo per month up to 2032. Under the deal, ENI was to provide per month cargo at 11.6247 percent of the Brent for the first two years, 11.95 percent for the following two years, and 12.14 percent for the remaining 11 years. ENI is bound to provide PLL with a total of 180 cargoes in 15 years at the PGPL terminal moored in Port Qasim. When ENI first communicated, the official said, some weeks back that it would not be able to provide cargo in January 2024, the top notches in the ministry turned upset and started working on more gas load management. However, later on, ENI confirmed to the relevant authorities that it would not back out but rather would provide the cargo on time. This is how the surge in the current gas crisis with more deficit of 250 mmcfd would have lasted for two weeks in January 2024 which is now averted.

The federal government has declined to absorb Pakistan International Airlines’ (PIA) Rs263 billion debt, instead proposing to settle dues with nearly a dozen domestic commercial banks using the privatisation proceeds of the airline. The finance ministry, supported by Prime Minister Anwarul Haq Kakar, rejected the proposal to merge PIA’s Rs263 billion debt into the public debt. The PM office did not respond to a request for comments despite repeated attempts. This decision follows the national airline defaulting on over Rs17 billion in debt repayments to seven commercial banks by early December, according to the government sources. Of the Rs17 billion, an amount of Rs5.8 billion has been overdue for more than three months, they added. Finance Minister and Privatisation Minister conducted a series of meetings to address PIA’s ongoing financial troubles. Despite the privatisation minister briefing the prime minister on progress with PIA debt restructuring, the finance minister rejected three key proposals to include PIA’s debt in the public debt. The finance minister argued against leaving a negative legacy by incorporating a corporation’s debt into public debt.

Pakistan's information technology (IT) exports rose by nine percent month-on-month to $259 million in November 2023, the highest level in the past 12 months. The increase was mainly driven by a relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), which allowed IT exporters to keep 50 percent of their foreign earnings in their specialized accounts, up from 35 percent previously. A stable rupee also encouraged IT companies to repatriate their foreign income and deposit it in local accounts. The IT minister previously said that IT companies had parked an estimated $1-2 billion outside of Pakistan, which could be brought back to boost the country's foreign exchange reserves. The IT export figure reflects the amount remitted back to Pakistan by technology companies, which provide services such as software development, web design, data processing, and call centers to clients around the world.

After giving it for 50 years, the government on 20th December finally pulled the plug on a hidden export subsidy scheme and approved its transfer to the federal budget. It agreed to phase out the Export Finance Scheme of the State Bank of Pakistan (SBP), a requirement of the International Monetary Fund’s (IMF) standby arrangement, according to a statement issued by the Ministry of Finance after the meeting. In order to put in place a new arrangement, the ECC gave approval for releasing Rs3.9 billion to Exim Bank in the current fiscal year. Pakistan has agreed with the IMF that it will end the hidden unbudgeted subsidies for exporters and shift them from the central bank to the federal budget. In the first phase, the government has pulled the plug on a short-term export financing scheme. Exporters will still get loans at a rate 3% lower than the key policy rate but the money will be provided by banks and the markup difference will be borne by the federal government. The end-user markup subsidy has been kept at 3% below the SBP’s policy rate, currently standing at 19%, while a 2% spread is kept for banks for arranging commercial liquidity. The subsidy will be provided by the government through Exim Bank. Besides allocating Rs5.7 billion during financial year 2023-24 for the purpose, the government will earmark the markup subsidy annually under the scheme till 2028 for gradual portfolio shift.

Pakistan has filed a lawsuit against a foreign company for failing to supply liquefied natural gas (LNG) as per a five-year agreement, causing the country to suffer millions of dollars in losses. The International Arbitration Court in London was expected to hear the case next month on Pakistan's request. The un named foreign company did not deliver LNG cargoes as agreed and sold them to richer countries at a higher profit. Pakistan had to buy the most expensive LNG in the region due to the cancellation of LNG cargoes. The agreement with the foreign company was equivalent to 11.62 percent of the Brent price and was valid till 2022.

Pakistan and China have signed several memoranda of understanding (MoUs) for a hefty investment of $10 billion in four major export-oriented sectors signifying a robust commitment to the country’s economic growth. The joint ventures (JVs) are aimed at establishing industries in key sectors including textiles, agriculture, food, and car spare parts manufacturing, Caretaker Commerce Minister Mr. Gohar said while talking to media. The MoUs were signed between the private sectors of the two countries. The minister has said that he plans to visit China on Jan 15 for subsequent discussions with Chinese investors. These potential investors are scheduled to visit Pakistan in February to deepen their engagement with local partners and finalise their investment plans in special economic zones. Under the proposed joint ventures, there will be a complete Chinese investment. Investors in the textile, food, agriculture, and automobile parts sectors will add value to exports to China and other countries. Furthermore, these investors can take advantage of the preferential market access under the Generalised System of Preferences Plus scheme to the European market. This presents a significant opportunity for exporters to gain duty-free access to European markets. Mr Gohar revealed that a protocol has been signed with a Chinese investor to cultivate peanuts across 10,000 acres of the Cholistan desert. The peanuts will be exclusively grown for export purposes.