The State Bank of Pakistan (SBP) has strongly rebutted placing any restriction on Letters of Credit (LCs) for import of oil, LNG and petroleum products.
The State Bank of Pakistan (SBP) on Thursday issued a clarification on some misinformation being spread in the media that the import of oil and petroleum products has been restricted by the central bank.
It is clarified that the SBP has not placed any restriction (verbal or otherwise) on opening of LCs or contracts for import of crude oil, LNG and petroleum products. Such misinformation is being spread with ulterior motives to create uncertainty in the market, the SBP said.
It was reported previously that SBP informed oil refineries and oil marketing companies (OMCs) that they would not be opening any new Lines of Credit (LCs) for the import of fuel until the sixth of December.
Industry insiders claim that the closure of LCs might lead to a lack of petroleum supplies throughout the nation. According to information about the situation, the central bank may be closing LCs to save dollars as it plans to retire Eurobonds. OMCs and refineries have verbally received instructions to balance their imports and exports.
Sources further said that all banks, including HBL, Meezan, Habib Metro, etc., have orally asked the oil industry to delay the opening of LCs until December 6, 2022. A senior Oil Companies Advisory Council member responded when asked that they had not yet heard any complaints from their members. “No one has complained to us about issues with bank LC openings. However, some have mentioned delays in LC opening. I wonder if it’s by design or procedure.
When former FBR chairman Shabbar Zaidi said in a television appearance that the country would experience a petrol scarcity due to the SBP’s decision, the news of the LCs’ closure first spread.
The spokesman for the state bank has remained silent on the matter, but sources close to the institution have responded coolly, stating that there is no evidence that the SBP has issued any such hint. However, according to insiders, the primary problem is that the SBP communicates verbally rather than in writing.
According to a source in the refining business, because banks have requested that they balance their imports and exports, the oil industry as a whole is experiencing these issues. The administration continues to assert that there would be no shortage; OGRA reported earlier this month that Pakistan had enough fuel on hand to last a little over three weeks.