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
Saudi Arabia preparing for strategic economic pact with Pakistan, Saudi envoy says
- The statement follows the signing of a bilateral defense agreement in Sept. to enhance joint deterrence
- Both nations also agreed on an economic framework to prioritize energy, industry, mining and other projects
ISLAMABAD: Saudi Arabia is preparing to sign a strategic economic pact with Pakistan to further strengthen ties between the two brotherly nations, the Saudi ambassador to Pakistan said on Tuesday, months after both countries signed a Strategic Mutual Defense Agreement (SMDA).
The statement by Saudi Ambassador Nawaf bin Said Al-Malki came during his interaction with Arab News on the sidelines of the launch of the King Salman Humanitarian Aid and Relief Center’s (KSrelief) Ramadan food assistance program for deserving Pakistanis.
It followed a landmark defense pact between the two countries, signed in Sept. last year, under which Islamabad and Riyadh pledged that aggression against one would be treated as an attack on both.
The move was widely viewed as formalization of longstanding military cooperation into a binding commitment, while both countries agreed a month later to launch an economic cooperation framework to strengthen trade and investment ties.
“Three months ago, we signed, you know, the Strategic Mutual Defense agreement. Today, god willing, we will be preparing for another, you know, strategic plan for the economy of Pakistan and Saudi Arabia,” the Saudi ambassador told Arab News, adding the economic plan would be signed “soon.”
Saudi Arabia and Pakistan agreed to launch the economic cooperation framework to strengthen trade and investment ties during Prime Minister Shehbaz Sharif’s visit to Riyadh in Oct. last year.
A joint statement issued after Sharif’s meeting with Crown Prince Mohammed said the framework would include several strategic, high-impact projects, prioritizing energy, industry, mining, information technology, tourism, agriculture and food security.
“This framework represents an extension of both countries’ efforts to strengthen their fraternal relations and reaffirms their shared vision toward building a sustainable partnership across various economic, trade and investment fields,” the joint statement said in Oct.
The two countries have already signed a memorandum of understanding for an electricity interconnection project.
Saudi Arabia and Pakistan have enjoyed close relations for decades but have moved to broaden their cooperation in recent years. In 2024, the two countries had also signed 34 memorandums of understanding (MoUs) worth $2.8 billion across multiple sectors.
The KSrelief Ramadan food assistance program, launched on Tuesday, aimed to distribute 27,000 food baskets to support 192,500 vulnerable individuals in 30 districts across Pakistan.
Each food package includes 80 kilograms of wheat flour, 5 liters of cooking oil, 5 kilograms of sugar, 2 kilograms of dates, and 5 kilograms of gram pulse, according to the charity. The contents are calculated to sustain an average household for the entire month of Ramadan.
“The project reflects the Center’s broader humanitarian mandate to alleviate suffering, enhance resilience, and support vulnerable communities,” the Saudi charity said.
“KSrelief reaffirms its continued commitment to addressing food security challenges in Pakistan.”
