FPCCI Proposes Energy Emergency to Shield Pakistan’s Economy from Middle East Conflict Petroleum Prices and Interest Rate Highest in the Region Atif Ikram Sheikh, President FPCCI

Karachi: Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce
and Industry (FPCCI), has strongly called upon the federal government to declare an immediate
energy emergency; and, implement reliable contingency measures to insulate Pakistan’s fragile
economic recovery and its exports from the severe fallout of the ongoing conflict in the Middle
East.

Mr. Atif Ikram Sheikh has highlighted that the compounding burden of regionally-uncompetitive
petroleum prices – already raised by an exorbitant PKR. 55 per liter – and punishingly high
interest rates – with key policy rate continuing to be at 10.5% – will cause Pakistan's cost of
doing business to soar to unsustainable levels and will effectively result in crippling the
industrial growth and exacerbate country’s exports slowdown even further.

FPCCI Chief stressed that while regional competitors maintain accommodative, single-digit
monetary policies and rationalize their petroleum prices to support their manufacturing bases,
Pakistani trade and industry will be stifled by exorbitant borrowing costs that paralyze capital
investment and modernization – coupled with relentless upward revisions in petroleum levies,
which directly inflate logistical, transportation and captive power generation expenses –
manufacturers will be left with severely eroded profit margins.

FPCCI Chief reiterated that Pakistan’s industrial sector cannot afford another external shock;
given our heavy reliance on Gulf energy imports from Saudi Arabia, the UAE and Qatar – and,
interruptions in crude oil and liquefied natural gas (LNG) supplies will fuel inflationary
pressures and deepen the cost-of-living crisis.

Mr. Atif Ikram Sheikh has highlighted the surging freight and insurance costs as war-risk
classifications have driven marine insurance premiums drastically higher. Freight costs on major
shipping routes have spiked by up to 300% – with daily LNG freight rates jumping by more than
40%.

President FPCCI maintained that supply chain delays on the back of rerouting shipments away
from the Gulf is projected to add 15 to 20 days to transit times for Pakistani exports heading to
key markets in the European Union, the UK and the United States.

Mr. Atif Ikram Sheikh also pointed out the vulnerability of Pakistani ports as both Port Qasim
and Karachi Port are directly linked to Gulf shipping routes; leaving domestic supply chains
highly exposed to maritime disruptions and massive delays.

Mr. Atif Ikram Sheikh stressed that while the current 28-day petroleum reserve offers a brief
buffer, it is insufficient for an extended regional conflict. We are exposed to a severe economic
shock if tensions persist. Coordinated action between policymakers, regulators and the business
community is indispensable right now, he added.

Mr. Saquib Fayyaz Magoon, SVP FPCCI, demanded that national strategic oil reserves need
initiation of an urgent framework to build up strategic petroleum reserves from the current 28
days of consumption coverage to a more resilient and logical 60-90 day target.

SVP FPCCI said that protecting export competitiveness has become imperative and introduction
of targeted policy actions to absorb the shock of rising imported raw material costs and probable
exchange-rate volatility is warranted.

FPCCI stands ready to assist the government in formulating and executing these contingency
plans to ensure the survival of Pakistan's trade and industry during this period of unprecedented
global uncertainty

Brig Iftikhar Opel, SI (M), Retd.

Secretary General