Pakistan Has 'Blocked' Payments for Imported Electricity and Oil from Iran

A member of the Zabol Chamber of Commerce has stated that Pakistan has blocked payments for electricity and oil products imported from Iran. Emanullah Kahrizahi said on Wednesday, September 7, to ILNA news agency that the heavy shadow of 'U.S. dominance over the Pakistani government' has caused the economic relations between Iran and this eastern neighbor to not flow favorably, resulting in the money from Iran's oil and electricity sales to Pakistan being blocked in that country. Iran exports 500 gigawatt-hours of electricity to Pakistan annually, which is priced at around 60 to 70 million dollars in regional markets. Statistics from the Iranian Chamber of Commerce also indicate that last year about 70 million dollars worth of liquefied gas (propane and butane) was exported to Pakistan, which is a type of crude oil product. Iran also exports mazut to Pakistan, but no reports have been published regarding its volume and value. According to the Chamber of Commerce statistics, the total non-oil exports from Iran to Pakistan in the year 1402 (2023) were about 2 billion dollars. Pakistan remains concerned about Western sanctions regarding gas imports from Iran. The member of the Zabol Chamber of Commerce further mentioned the possibility of establishing a joint bank between Iran and Pakistan, stating that the establishment of this bank remains merely a discussion. He explained: 'The main problem is that the U.S. has a strong presence in Pakistan; therefore, this affects any relations between the governments of Iran and Pakistan, and the establishment of a joint bank is no exception. This issue has even prevented Pakistan from settling the payments for electricity and oil it has purchased from Iran, and these amounts are blocked in that country.' Iran's inability to receive payments for exported electricity and oil products to Pakistan comes at a time when over the past few years, the Tehran government has pressured its eastern neighbor to begin importing gas from Iran according to a contract signed during Mahmoud Ahmadinejad's presidency. According to the contract, Pakistan was supposed to buy 7 billion cubic meters of gas from Iran annually starting in 2015, valued at around 2 billion dollars in regional markets. Meanwhile, the payments for Iran's exported electricity and gas to Iraq have also been blocked for years due to U.S. sanctions, and Iran can only use these funds to purchase humanitarian goods from Iraq itself. Last summer, the U.S. granted Iran permission to use its blocked funds in Iraq to buy humanitarian goods from other countries, but the blocked funds in the Iraqi Trade Bank are in Iraqi dinars, which have limited utility in other countries. Regarding Pakistan, its imports from Iran are three times its exports to the Islamic Republic, and Iran's ability to utilize the financial resources from selling electricity and oil products to Pakistan for importing goods is also restricted.