ISLAMABAD: Pakistan could face a financial penalty of $18 billion, said a senior government functionary while briefing the Public Accounts Committee (PAC) of the National Assembly on Wednesday, if it failed to implement a pipeline project involving Iran on time.
The two countries reached a preliminary agreement to build a pipeline in 1995 to help Pakistan import natural gas from Iran.
The project originally planned to involve India as well, though the administration in New Delhi pulled out in 2009 due to pricing and security issues.
Briefing the committee over the issue, petroleum division secretary Muhammad Mahmood said the government had discussed the issue with the United States, which has imposed sanctions on Iran, while seeking relief.
“The members of the committee asked how much penalty could be imposed on Pakistan for not completing the Iran gas pipeline on time,” reported the Express Tribune newspaper. “The secretary petroleum responded that as per the agreement, the penalty could be $18 billion. He also remarked that they have asked the US ambassador to either give them permission to go ahead with the project or give them money to pay the fine.”
The committee instructed the foreign ministry to discuss the situation with the US envoy to the country.
Pakistan has been trying to explore different options to import energy products at discounted rates from the international markets to reduce its import bill amid mounting financial challenges.
According to official figures, the country has already imported energy products worth $10.6 billion during the first seven months of the current fiscal year.
Last year, its petroleum import bill stood at $23.3 billion, which was 105 percent higher than the year before that.
Iran may fine Pakistan $18 billion for delaying joint pipeline project — official
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Iran may fine Pakistan $18 billion for delaying joint pipeline project — official
- The two countries signed a preliminary agreement to carry out the project in 1995 to help Pakistan import gas from Iran
- The government has taken up the issue with US authorities, who have imposed sanctions on Tehran, while seeking relief
Pakistan issues over $7 billion sukuk in 2025, nears 20 percent Shariah-compliant debt target
- Finance Adviser Khurram Schehzad says this was the highest-ever Sukuk issuance in a single calendar year since 2008
- Pakistan’s Federal Shariat Court ordered in 2022 the entire banking system to transition to Islamic principles by 2027
ISLAMABAD: Pakistan’s Finance Adviser Khurram Schehzad on Monday said the country achieved a landmark breakthrough in Islamic finance by issuing over Rs2 trillion ($7 billion) sukuk this year, bringing it closer to its 20 percent Shariah-compliant debt target by Fiscal Year 2027-28.
A sukuk is an Islamic financial certificate, similar to a bond, but it complies with Shariah law, which forbids interest. Pakistan’s Federal Shariat Court (FSC) had directed the government in April 2022 to eliminate interest and align the country’s entire banking system with Islamic principles by 2027.
Following the ruling, the government and the State Bank of Pakistan (SBP) have undertaken a series of measures, including legal reforms and the issuance of sukuk to replace interest-based treasury bills and investment bonds.
“In 2025, the Ministry of Finance (MoF) through its Debt Management Office, together with its Joint Financial Advisers (JFAs), successfully issued over PKR 2 trillion in Sukuk,” Schehzad said on X, describing it as “the highest-ever Sukuk issuance in a single calendar year since 2008 by Pakistan.”
Pakistan made a total of 61 issuances across one-, three-, five- and 10-year tenors, according to the finance adviser. The country also successfully launched its first Green Sukuk, a Shariah-compliant bond designed to fund environment-friendly projects.
He said the Green Sukuk was 5.4 times oversubscribed, indicating investor demand was more than five times higher than the amount the government planned to raise, which showed strong market confidence.
“The rising share of Islamic instruments in the government’s domestic securities portfolio (domestic debt) underscores strong momentum, growing from 12.6 percent in June 2025 to around 14.5 percent by December 2025, clearly positioning the MoF to achieve its 20 percent Shariah-compliant debt target by FY28,” Schehzad said.
“This milestone also reflects the structural deepening of Pakistan’s Islamic capital market, sustained investor confidence, and the strengthening of sovereign debt management.”
He said Pakistan was strengthening its government securities market by making it more resilient, diversified, and future-ready, supported by a stabilizing macroeconomic environment, a disciplined debt strategy, and a clear roadmap for Islamic finance.
