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Statements by the Board of Governors (SBP) Dispel Rumors of Curtailed Access to Opening Lines of Credit for the Import of Crude Oil and LNG.

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Statements by the Board of Governors (SBP) Dispel Rumors of Curtailed Access to Opening Lines of Credit for the Import of Crude Oil and LNG.

Crude Oil and LNG

No restrictions have been placed on opening letters of credit for importing crude oil and LNG, and SBP will want to clarify that point.

The SBP wants to emphasize this point as much as possible.

The State Border Patrol noted in a statement made public. It made available to the public that “such content is being shared with ulterior motives to generate confusion.”

It has been made clear that the day before the national bank plans to use any letters of credit for oil importation, those credits will be cancelled.

Access to this decision has been granted to the general public.

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Imports of Crude Oil and LNG; The State Bank of Pakistan (SBP)

Dispelled speculation on Thursday that crude oil imports, (LNG), and other petroleum products will be restricted because of government intervention.

The limitations were affected by the opening of LCs or contracts for importing crude oil, LNG, and several other petroleum products.

The government was rumoured to have made acquiring a line of credit (LC) or signing a contract more difficult.

A short statement from the central bank read, “Such material is being circulated with ulterior intentions to generate confusion in the market.”

Refineries rely on a steady supply of imported chemicals to process crude oil. Still, there have been reports that the supply of these chemicals is in jeopardy today.

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As of Today, These Rumors Have Been Doing the Rounds.

Refineries must have access to various chemicals to process crude oil.

Such reports indicate that the country will undoubtedly face a severe scarcity of petroleum goods as a direct outcome.

Such a deficiency would be a natural consequence of the current situation.

The inability to import these chemicals could lead to a shortage of petrochemical products, say these sources.

A breakdown in the importation of crucial chemicals is the basis for this forecast.

A lack of this kind would be an inevitable consequence of the upheaval.

Letters of credit for the import of chemicals needed for the operations of refineries reportedly weren’t being opened, leading to concerns that refinery operations would be cut back or halted altogether and, in turn, leading to a shortage of POL products, in particular, Mogas (petrol).

Imports of Crude Oil and LNG; According to a Statement Released Today,

The United States Central Bank (SBP) works with financial institutions to facilitate the prompt processing of foreign currency payments related to importing oil and gas products.

All of these transactions are being conducted in a different currency.

These transactions are conducted in a foreign currency not commonly used in the region (including LNG).

To avoid any potential issues, these payments must be processed promptly, corresponding to the maturity of the trade contracts.

Trade data released by the SBP showed that the country’s oil import stood at $1.48 billion and $1.47 billion in September 2022 and October 2022, respectively, so it seems that all LCs or contracts for oil import are being retired on their due date through interbank foreign exchange market without any delay.

Without delay, it stated that “all LCs or contracts for oil import are being retired on the due date through interbank foreign exchange market.”

It said all oil import contracts and letters of credit are being settled in full through the foreign exchange market on their scheduled maturity dates.

The report states, “All oil import contracts and letters of credit will be retired on their due dates through the interbank foreign currency market with zero delays.”

Crude Oil and LNG

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