KARACHI: President of the United Business Group (UBG) and former President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Zubair Tufail, has expressed support for Pakistan’s decision to pay $3.5 billion to the United Arab Emirates. Tufail suggests that this payment could be a strategic move to alleviate potential political pressure from Dubai. He emphasizes the importance of settling this payment to prevent any leverage the UAE might exert on Pakistan.

According to United Business Group, Tufail highlighted the global economic strain resulting from ongoing tensions involving the United States, Israel, and Iran. He noted the significant increase in crude oil prices, with a surge from $65 to $110 per barrel, which is impacting economies worldwide. The situation is further exacerbated by the disruption of LNG supplies, following the closure of the Strait of Hormuz, affecting Qatar’s export capacities and consequently leading to a rise in LNG prices in Europe.

Tufail pointed out the escalating production costs in Pakistan amid these geopolitical tensions and referenced a tweet by former US President Donald Trump, suggesting potential further escalation that could drive oil prices to as high as $175 per barrel. Despite these challenges, he commended the current Pakistani government for its handling of the crisis, warning that any failure to manage the situation could have severe economic repercussions.

He also mentioned the looming pressure on Pakistan’s economy due to an impending $4.8 billion debt repayment, including a $1.3 billion Eurobond. Tufail voiced concerns over the inflationary effects of rising petroleum prices and the impact on lower- and middle-income groups, emphasizing the need for effective strategies to mitigate these challenges. He concluded by highlighting the risk of supply chain disruptions, which could lead to shortages of essential goods if the situation remains unaddressed.